Market Shift Adjustments under Global Revenue and Total ... · 9/1/2015 · overview of the...

Market Shift Adjustments under Global Revenue Models

Market Shift Adjustments under Global Revenue and Total Patient Revenue Models

Technical Report RY 2016

September 1, 2015

Health Services Cost Review Commission 4160 Patterson Avenue

Baltimore, Maryland 21215 (410) 764-2605

FAX: (410) 358-6217

This document contains technical specifications for Global Budget Contract Market Shift Adjustments for rate year 2016.

Table of Contents

1. Introduction ...................................................................................................................................1

2. Overview ........................................................................................................................................1

3. Guiding Principles ..........................................................................................................................3

4. Market Shift Calculations ...............................................................................................................4

4.1 Market Shift Algorithm ..........................................................................................................4

4.2 Geographic Area Definitions ..................................................................................................5

4.3 Service Line Definitions ..........................................................................................................6

4.4 Exclusions ...............................................................................................................................6

4.5 Timing Adjustments ...............................................................................................................7

4.6 Case Weights and Equivalent Case-Mix Adjusted Discharges ...............................................7

5. Market Shift Revenue Calculations ................................................................................................8

6. Potentially Avoidable Utilization Modifications ............................................................................8

Appendices: Technical Specifications for Market Shift Calculations for Rate Year 2016 ..................10

Appendix I: APR-DRG Service Line Map (APR-DRG version 32) ...................................................11

Appendix II: Outpatient Service Line Assignment Hierarchy .......................................................21

Appendix III: 30-Day Readmission Definition Overview ..............................................................22

Appendix IV: PQI Overview ..........................................................................................................23

Appendix V: Categorical Case Exclusions .....................................................................................24

Appendix VI: Steps for Calculating APR-DRG Weights .................................................................25

Appendix VII: EAPG Service Line Map (EAPG version 3.8) ...........................................................28

Appendix VIII: Steps in Calculating Outpatient Weights..............................................................42

Appendix IX: Public Comments ....................................................................................................2


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This document, prepared in conjunction with the Payment Models Work Group, contains

principles for consideration as market shift adjustments to Maryland hospital global budgets are

developed and applied. It is a work in progress and may be modified as the approaches and

calculations for adjustments are finalized.

1. INTRODUCTION

In January 2014, the Center for Medicare & Medicaid Innovation (CMMI) approved the

implementation of a new All-Payer Model for Maryland. In contrast to the previous Medicare

waiver that focused on controlling increases in Medicare inpatient payments per case, the new

All-Payer Model focuses on controlling increases in total hospital revenue per capita. Central to

the All-Payer Model is the Global Budget Revenue (GBR) methodology, which encourages

hospitals to focus on population-based health management by prospectively establishing an

annual revenue cap for each GBR hospital. Under the GBR methodology, each hospital’s total

annual revenues are known at the beginning of the year, and annual revenue is determined from a

historical base period that is adjusted to account for a number of factors, including market shifts.

The Market Shift Adjustments (MSAs) mechanism is part of a much broader set of tools that

links global budgets to populations and patients under the State's new All-Payer Model. The

specific purpose of the MSA is to provide criteria for increasing or decreasing the approved

regulated revenue of Maryland hospitals operating under GBR or TPR (Total Patient Revenue)

rate arrangements. Providing these criteria is important for ensuring that revenue is appropriately

reallocated when shifts in patient volumes occur between hospitals as a result of efforts to

achieve the Triple Aim of better care, better health, and lower costs. MSAs under GBR

arrangements are fundamentally different from volume adjustments. Hospitals under a

population-based payment system, such as GBR, have a fixed budget for providing services to

the population in their service area. Therefore, it is imperative that MSAs reflect shifts in patient

volume independent of general volume increases in the market.

The purpose of this document is to describe the principles governing the development of MSA

mechanisms that will be applied as part of Maryland’s global budget system and provide a brief

overview of the methodology. The Appendices provide more detailed information about the

methodology and include public comments.

2. OVERVIEW

An MSA should contain the following features:

A specified population from which hospitals’ market shifts will be calculated

A defined set of covered services

An approach that is budget neutral to the maximum extent practicable and/or results in

demonstrably higher quality of care


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The MSA should complement the GBR incentives to eliminate marginal services that do not add

value, are unnecessary, or result from better community-based care. Therefore, MSAs should not

be applied to appropriate reductions in utilization.

MSAs are one of the global budget tools necessary to account for changes in utilization levels

and patterns. GBR agreements contain other mechanisms intended to ensure the continued

provision of needed services for Maryland patients, including:

Population/Demographic Adjustments: Changing demographics could result in a

growth in the demand for hospital services. Currently, the annual update factor adjusts

revenue to capture changes in the overall population. Annual hospital-level population

adjustments will capture changes in total population/demographics in each hospital’s

service area.

Annual Update Provides Flexibility to Fund Innovation/New Services/Growth in

Selected Quaternary Services: Targeted funding could be provided through the update

process. For example, the new Holy Cross Germantown Hospital is partially funded from

the general update process. Consideration is given to annual budget changes for

quaternary services, such as transplants, burns, and highly specialized cancer care, for

Johns Hopkins Hospital and University of Maryland Hospital Center under their global

budget agreements.

Transfers to Johns Hopkins Hospital, University of Maryland Hospital Center, and

Shock Trauma Center: Adjustments will be made for changes in patient transfers to

respective centers to ensure that resources are available to treat patients needing the

specialized care provided in these settings.

Potentially Avoidable Utilization (PAU): PAU is excluded from the MSAs and will be

analyzed separately. This exclusion prevents the possibility of rewarding a hospital that

increased its PAU at the expense of a hospital that appropriately reduced its PAU. A

PAU-focused analysis, when warranted, will allow an assessment of PAU reductions that

are not driven by improvements in population health, such as diversion of patients to an

unregulated setting, transfer of patients due to changes in referral patterns by purchasers,

or a less favorable change in service delivery (such as eliminating or contracting service

lines that have high PAU volumes) that should not be rewarded.

The basis for distinguishing between desirable and undesirable utilization changes is the Triple

Aim of the new system: to improve health care outcomes, enhance patient experiences, and

control costs. MSAs, together with other global budget agreement provisions and Health

Services Cost Review Commission (HSCRC) policies, will need to focus on efforts that support

the Triple Aim. Examples of actions that help achieve the Triple Aim are those that result from:

Providing high quality hospital care resulting in fewer hospital-acquired conditions

Making efforts to improve care coordination and patient discharge planning resulting in

fewer re-hospitalizations


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Promoting the provision of care in the most appropriate setting, resulting in fewer initial

hospitalizations for ambulatory care sensitive conditions and conditions that can be

treated equally effectively in other settings at lower cost

Providing services in lower cost settings without compromising patient care.

Possible examples of actions that undermine the Triple Aim and should be avoided include:

Prompting patients with unprofitable service needs to seek care elsewhere, or reducing

the volume of non-profitable services below the amount needed by patients within the

hospital’s service area

Reducing capacity or service ability to the point of creating long waiting lists or delays

Under-investing in new technology or modes of care proven to be efficient ways of

improving patient health, safety, or quality

Reducing the total level of a hospital’s medical staff or the quality of affiliated providers

to the point of compromising patient care

Similarly, MSAs, together with other mechanisms and policies, must distinguish between

increases in utilization at any given hospital that should be recognized and those that should not

be recognized. For example, hospitals should receive increases to their approved regulated

revenue in circumstances that result in a shift of patient volumes that are beyond the hospital’s

control, such as the closure of a service at a particular hospital and resulting relocation of

patients receiving that service to another facility, or other discrete and readily identifiable events.

As long as the financial drivers of the shift are transparent and value-based, hospitals should also

receive an MSA if organizations such as health maintenance organizations (HMOs), accountable

care organizations (ACOs), or primary care medical homes (PCMHs) direct their members to the

facility to improve efficiency, cost-effectiveness, and quality.

The MSA policy should not encourage shifts in volume that are not clearly relatable to

improvements in the overall value of care, such as marketing or acquisition strategies that merely

shift the location or ownership of resources without increasing access, improving outcomes, or

reducing costs in a geographic area. In February 2014, the Commission reduced the variable cost

factor for volume changes from 85 percent to 50 percent for services provided outside of GBR

arrangements, yet subject to the All-Payer Model. Applying this lower variable cost factor to

MSAs will contribute to limiting incentives to increase volume through strategies that do not

improve care or value.

3. GUIDING PRINCIPLES

In developing its MSA approach, the HSCRC should follow the following guiding principles:

1. Provide clear incentives.

1.1. Promote the Triple Aim

1.2. Emphasize value, recognizing that this concept will take some time to develop


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1.3. Promote investments in care coordination

1.4. Encourage appropriate utilization and delivery of high quality care

1.5. Avoid paying twice for the same service

2. Reinforce the maintenance of services to the community.

2.1. Encourage competition to promote responsive provision of services

2.2. Competition should be based on value

2.3. Revenue should generally follow the patient

2.4. Support strategies pursued by entities such as ACOs, PCMHs, and managed care

organizations (MCOs) seeking to direct patients to low-cost, high-quality settings

3. Clearly define changes constituting a market shift.

3.1. Volume increase alone is not a market shift change

3.2. Market shift should be evaluated in combination with the overall volume trend to

ensure that a shift—rather than volume growth—has occurred

3.3. If one hospital has higher volume and other hospitals serving the same area do not

have corresponding declines in volume, a market shift should not be awarded

3.4. Increases in the global budget of one hospital should be funded fully by the decrease in

other hospitals’ budgets

3.5. Market shift changes should reflect services provided by the hospital

3.6. Substantial reductions at a facility may result in a global budget reduction even if they

are not accompanied by shift to other facilities in the service area (Investigate shifts to

unregulated facilities and limitations on types of procedures)

3.7. Closures of services or discrete and readily identifiable events should result in a global

budget adjustment and an MSA as needed

3.8. Market shifts in PAU should be evaluated separately1

4. MARKET SHIFT CALCULATIONS

4.1 Market Shift Algorithm

Based on the principles listed above, HSCRC developed an algorithm to calculate MSAs for a

specific service area (e.g., orthopedic surgery) and a defined geographic location (e.g., ZIP

code). The algorithm compares the growth in volumes at hospitals with utilization increases to

the decline in volumes at hospitals with utilization decreases. Adjustments are capped at the

lesser of the growth for volume gains or the decline for volume losses. This approach separates

market shifts from collective changes in volume in the service area and removes incentives for

driving up volume in the service area.

1 There are limited circumstances in which HSCRC might want to recognize a market shift in PAUs. For example, if

an HMO moved all of its patients from one facility to another, there may be an appropriate shift in revenue for some

level of PAU cases. Similarly, if a PCMH changed its hospital affiliation, there may be a shift in PAU volumes from

one facility to another.


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Table 1 provides an illustration of the market shift calculation for ZIP code 21000 and the

General Surgery service line. Within this ZIP code, the total volume increase is 654 equivalent

case-mix adjusted discharges (ECMADs), and the decline is 129 ECMADs. Applying the “lesser

of the two” rule, the allowed market shift is limited to 129 ECMADs, which is allocated to other

hospitals with volume increases proportional to this hospital’s volume increase in total

utilization. In the end, the net impact of market shifts in each ZIP code and service line

combination equals zero.

Table 1. Example Calculation of the Market Shift Algorithm

ZIP Code 21000 General Surgery

Volume CY13

Volume CY14

Volume Growth

Hospital’s Proportion of Total

Increase/Decline Market Shift

A B C=B-A D=C/Subtotal C E=D*Allowed Market Shift

Hospital A 1,000 1,500 500 76% 99

Hospital B 500 600 100 15% 20

Hospital C 50 100 50 8% 10

Hospital D - 4 4 1% 1

Utilization Increase 1,550 2,204 654 100% 129

Hospital E 500 400 (100) 78% (100)

Hospital F 50 25 (25) 19% (25)

Hospital G 4 - (4) 3% (4)

Utilization Decline 554 425 (129) 100% (129)

ZIP Code Total 2,104 2,629 525 - 0

Allowed Market Shift 129

4.2 Geographic Area Definitions

Market shift is focused on movement of patients and services between Maryland hospitals.

Narrowly defined geographic regions are ideal for calculating market shift because the individual

hospitals serving the region are not likely to be differentially impacted by population growth or

demographically driven changes in utilization rates. Calculating market shift at the statewide

level, in contrast, would result in the movement of dollars to hospitals in regions experiencing

population growth at the expense of other regions. Adjustments for changes in population and

demographics are already addressed by annual demographic adjustments to each hospital’s

global budget.

In densely populated regions of the state where there is significant competition among hospitals,

market shift calculations are performed at the ZIP code level. However, ZIP code level

calculations introduce random variation to the measurement in small geographic areas where the

population density is low, and the health care market is concentrated. Such ZIP codes are


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aggregated to limit the impact of small cell sizes on the calculations. ZIP codes in the following

jurisdictions are aggregated at the county level:

Garrett, Allegany, Washington, Cecil, Kent, Queen Anne’s, Caroline, Talbot, Dorchester,

Wicomico, Somerset, Calvert, Charles, Saint Mary’s, Worcester

In calculating market shifts, all hospitals will have the same geographic definitions. For example,

to calculate volume changes in Garrett County, all ZIP codes in Garrett County will be added

together for each hospital with volume in Garrett County. The calculations of volume changes

will be based on ZIP code-level analysis for the remaining jurisdictions that are not aggregated,

such as Baltimore City.

4.3 Service Line Definitions

Narrow definitions of service lines are proposed to prevent utilization growth for one component

of the service line from masking a shift in patients for another service line. For instance, a

service line that captures all surgical procedures might be growing at every hospital in a region

due to increasing demand for orthopedic surgery and thereby masking the shift of 50 cardiac

surgical procedures from one hospital to another.

Movement of cases from inpatient to outpatient settings and utilization of observation units

creates a challenge in differentiating shifts from one hospital to another, or shifts from a

hospital’s inpatient to outpatient service settings. Staff has started to address this issue by

counting and weighting all observation room cases of 24 or more hours as inpatient. Staff is

planning to continue to work on combining other outpatient cases with inpatient cases for future

year adjustments and evaluating the impact of shifts from inpatient to outpatient services on a

case by case basis.

Inpatient service lines are developed using the existing 3M methodology to group all patient

refined-diagnosis related groups (APR-DRGs) to specific service lines with a few modifications.

See Appendix I for a cross walk of APR-DRGs to service lines.

While inpatient service lines have been widely used and easily understood due to the availability

of APR-DRGs, outpatient service lines are more difficult to develop. Conceptually, staff uses an

inpatient-like logic and assigns the visits based on the reasons for acquiring services. For

example, all services provided for emergency department (ED) patients are grouped under the

ED service line. Appendix II provides the hierarchy of outpatient service lines.

4.4 Exclusions

The following services or cases are excluded from the market shift calculations:

1. PAU: As hospitals improve care and population health, trends in PAU could reflect

differential performance among hospitals rather than market shifts. In other words, one

hospital may perform better than others and reduce its PAU, while another hospital


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serving a similar market may have an increase in PAU. For the rate year 2016

adjustments, staff included only readmissions and prevention quality indicators (PQIs)

developed by the Agency for Healthcare Research and Quality (AHRQ) that were

measured in both inpatient and observation cases equaling or exceeding 24 hours.

Appendices III and IV provide overviews of readmission indicators and PQIs.

2. Categorical exclusions: These cases represent the most specialized services received at

academic medical centers (AMCs) and are based on actual trends in these hospitals under

their global budgets. Appendix V provides the definitions of categorical cases.

4.5 Timing Adjustments

To accommodate the HSCRC case-mix data submission timelines, there will be a six month lag

between the measurement period and the rate adjustments. The rate year 2016 adjustments will

be based on comparing the measurement period of July 2014 through December 2014 to a base

year period of July 2013 through December 2013. After this initial measurement period, a full

calendar year will be used to calculate MSAs. Accordingly, rate year 2017 adjustments will be

based on January through December 2015, compared with January through December 2014.

4.6 Case Weights and Equivalent Case-Mix Adjusted Discharges

To measure utilization, HSCRC developed ECMADs as a method to quantify inpatient and

outpatient hospital volume into a single measure. A hospital’s ECMAD count includes case-mix

adjusted inpatient discharges, as well as equivalent adjusted outpatient case-mix discharges,

which are based on case-mix adjusted outpatient visits converted to inpatient discharges by the

ratio of the average inpatient visit charge per discharge to the average outpatient charge per visit.

Inpatient weights are developed using the Hospital Specific Relative Value (Iterative Weights)

methodology. Appendix VI provides the detailed steps for calculating inpatient weights.

Historically, HSCRC has been modifying the 3M APR-DRGs to account for differences in

resource use within the rehabilitation (860) and psychiatric DRGs (voluntary and involuntary).

Staff evaluated the impact of these modifications and found that the differences between national

APR-DRGs and the Maryland-specific DRGs were very limited. Further, staff expects that the

transition to International Classification of Disease-10th edition (ICD-10) will create inaccuracies

in defining these modifications, and 3M will improve the APR-DRG classifications using more

granular information from ICD-10 codes. Based on these considerations, HSCRC will use the

national 3M APR-DRGs for all adjustments starting with rate year 2016.

Outpatient weights primarily rely on 3M’s enhanced ambulatory outpatient grouping (EAPG)

system. After EAPG weights are assigned to each Current Procedural Terminology (CPT) code

in the patient records, a principal record type is assigned to differentiate types of visits into four

main categories:

Principle EAPG Type A: Radiation, Chemotherapy, and Major Infusion

Principal EAPG Type 2: Significant Procedures


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Principal EAPG Type 3: Medical Visit

Principal EAPG Type 4: All Other (Ancillary, Incidental, Drug, Durable Medical

Equipment, and Unassigned EAPG Types)

Once each record is grouped into these four principal EAPG types, singleton weights 2are

developed within each group and normalized. Singleton weights assign the highest EAPG that in

turn determines the assignment of the APG category for that record. Afterwards, these EAPGs

are mapped to initial service lines (see Appendix VII). Service lines used for market shifts are

determined using a hierarchy aiming to group the visits in accordance with the purpose of the

patient visit. Appendix VIII provides the technical documentation on outpatient weights.

5. MARKET SHIFT REVENUE CALCULATIONS

HSCRC staff evaluated several options in calculating the cost associated with market shift

changes using the algorithm described above. Two viable alternatives emerged:

The hospital specific average charge per ECMAD

Each hospital’s service line specific average charge per ECMAD

Service line-specific cost calculations have an advantage of overcoming the variation in

outpatient services within each service line. Inpatient DRG weights and prices have the

advantage of decades of refinement, while outpatient weights are relatively new. Hospital-

specific charges per ECMAD have the advantage of overcoming some of the underlying

variation in charges for equivalent cases on the outpatient side as further refinements are made

over time. The Maryland Hospital Association sent a letter to staff indicating that the hospital

industry supports use of the hospital service line average charge per ECMAD. Staff performed a

detailed review of the results using this approach (compared to the alternative approach), and are

satisfied with the results. Therefore, HSCRC is using service line ECMAD average charges to

develop the adjustments for each hospital. Consistent with initial policy implementation for the

new All-Payer Model, staff plans to use a 50 percent variable cost factor for MSAs between

regulated hospitals.

6. POTENTIALLY AVOIDABLE UTILIZATION MODIFICATIONS

Based on the discussion at the May Commission meeting, the implementation of the market shift

adjustments will be modified to allow for staff adjustments to the MSA amounts in the event that

a hospital can produce evidence that its decline in utilization was due to an intervention to reduce

avoidable utilization rather than a shift to another hospital. Hospitals are required to submit a

request for the modifications. The request must include information about the interventions

implemented, the impact by service-line and ZIP code, the impact on the statewide market shift

2 Singleton weights are average or medians weights calculated using visits that have only one procedure performed.


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calculations, and other related data supporting the adjustment. The deadline for the modification

request will be 15 days after the publication of the MSAs.

7. PAYER DRIVEN MARKET SHIFTS

To support strategies pursued by entities such as ACOs, PCMHs, and managed care

organizations (MCOs) seeking to direct patients to low-cost, high-quality settings, HSCRC staff

will be reviewing requests from hospitals to adjust the market shift calculations based on specific

circumstances of such strategies and reconciling the projections using the market shift

methodology described above.


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APPENDICES: TECHNICAL SPECIFICATIONS FOR MARKET SHIFT CALCULATIONS FOR RATE YEAR

2016

I. APR-DRG Service Line Map

II. Outpatient Service Line Assignment Hierarchy

III. 30-Day Readmission Definition Overview

IV. PQI Overview

V. Categorical Case Exclusions

VI. Steps for Calculating APR-DRG Weights

VII. EAPG Service Line Map

VIII. Steps in Calculating Outpatient Weights

IX. Public Comments


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Appendix I: APR-DRG Service Line Map (APR-DRG version 32)

The following table summarizes the APR-DRGs used to define each inpatient service line.

APR-DRG Description Product Category

Product Line

1 Liver transplant &/or intestinal transplant Transplant Surgery 40

2 Heart &/or lung transplant Transplant Surgery 40

3 Bone marrow transplant Transplant Surgery 40

4 ECMO or tracheostomy w long term mechanical ventilation w extensive procedure Ventilator Support 45

5 Tracheostomy w long term mechanical ventilation w/o extensive procedure Ventilator Support 45

6 Pancreas transplant Transplant Surgery 40

20 Craniotomy for trauma Neurological

Surgery 23

21 Craniotomy except for trauma Neurological

Surgery 23

22 Ventricular shunt procedures Neurological

Surgery 23

23 Spinal procedures Spinal Surgery 37

24 Extracranial vascular procedures Neurological

Surgery 23

26 Other nervous system & related procedures Neurological

Surgery 23

40 Spinal disorders & injuries Neurology 24

41 Nervous system malignancy Oncology 26

42 Degenerative nervous system disorders exc mult sclerosis Neurology 24

43 Multiple sclerosis & other demyelinating diseases Neurology 24

44 Intracranial hemorrhage Neurology 24

45 CVA & precerebral occlusion w infarct Neurology 24

46 Nonspecific CVA & precerebral occlusion w/o infarct Neurology 24

47 Transient ischemia Neurology 24

48 Peripheral, cranial & autonomic nerve disorders Neurology 24

49 Bacterial & tuberculous infections of nervous system Infectious Disease 17

50 Non-bacterial infections of nervous system exc viral meningitis Infectious Disease 17

51 Viral meningitis Infectious Disease 17

52 Nontraumatic stupor & coma Neurology 24

53 Seizure Neurology 24

54 Migraine & other headaches Neurology 24

55 Head trauma w coma >1 hr or hemorrhage Neurology 24


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Product Line

56 Brain contusion/laceration & complicated skull Fx, coma < 1 hr or no coma Neurology 24

57 Concussion, closed skull Fx nos,uncomplicated intracranial injury, coma < 1 hr or no coma Neurology 24

58 Other disorders of nervous system Neurology 24

70 Orbital procedures Ophthalmologic

Surg 27

73 Eye procedures except orbit Ophthalmologic

Surg 27

80 Acute major eye infections Ophthalmology 28

82 Eye disorders except major infections Ophthalmology 28

89 Major cranial/facial bone procedures ENT Surgery 8

90 Major larynx & trachea procedures ENT Surgery 8

91 Other major head & neck procedures ENT Surgery 8

92 Facial bone procedures except major cranial/facial bone procedures ENT Surgery 8

93 Sinus & mastoid procedures ENT Surgery 8

95 Cleft lip & palate repair ENT Surgery 8

97 Tonsil & adenoid procedures ENT Surgery 8

98 Other ear, nose, mouth & throat procedures ENT Surgery 8

110 Ear, nose, mouth, throat, cranial/facial malignancies Oncology 26

111 Vertigo & other labyrinth disorders Otolaryngology 32

113 Infections of upper respiratory tract Otolaryngology 32

114 Dental & oral diseases & injuries Dental 3

115 Other ear, nose, mouth, throat & cranial/facial diagnoses Otolaryngology 32

120 Major respiratory & chest procedures Thoracic Surgery 39

121 Other respiratory & chest procedures Thoracic Surgery 39

130 Respiratory system diagnosis w ventilator support 96+ hours Pulmonary 34

131 Cystic fibrosis - pulmonary disease Pulmonary 34

132 BPD & oth chronic respiratory diseases arising in perinatal period Pulmonary 34

133 Pulmonary edema & respiratory failure Pulmonary 34

134 Pulmonary embolism Pulmonary 34

135 Major chest & respiratory trauma Trauma 41

136 Respiratory malignancy Oncology 26

137 Major respiratory infections & inflammations Pulmonary 34

138 Bronchiolitis & RSV pneumonia Pulmonary 34

139 Other pneumonia Pulmonary 34

140 Chronic obstructive pulmonary disease Pulmonary 34

141 Asthma Pulmonary 34


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Product Line

142 Interstitial lung disease Pulmonary 34

143 Other respiratory diagnoses except signs, symptoms & minor diagnoses Pulmonary 34

144 Respiratory signs, symptoms & minor diagnoses Pulmonary 34

160 Major cardiothoracic repair of heart anomaly Cardiothoracic

Surgery 2

161 Cardiac defibrillator & heart assist implant Cardiothoracic

Surgery 2

162 Cardiac valve procedures w cardiac catheterization Cardiothoracic

Surgery 2

163 Cardiac valve procedures w/o cardiac catheterization Cardiothoracic

Surgery 2

165 Coronary bypass w cardiac cath or percutaneous cardiac procedure Cardiothoracic

Surgery 2

166 Coronary bypass w/o cardiac cath or percutaneous cardiac procedure Cardiothoracic

Surgery 2

167 Other cardiothoracic procedures Cardiothoracic

Surgery 2

169 Major thoracic & abdominal vascular procedures Vascular Surgery 44

170 Permanent cardiac pacemaker implant w AMI, heart failure or shock EP/Chronic Rhythm

Mgmt 9

171 Perm cardiac pacemaker implant w/o AMI, heart failure or shock EP/Chronic Rhythm

Mgmt 9

173 Other vascular procedures Vascular Surgery 44

174 Percutaneous cardiovascular procedures w AMI Invasive Cardiology 19

175 Percutaneous cardiovascular procedures w/o AMI Invasive Cardiology 19

176 Cardiac pacemaker & defibrillator device replacement EP/Chronic Rhythm

Mgmt 9

177 Cardiac pacemaker & defibrillator revision except device replacement EP/Chronic Rhythm

Mgmt 9

180 Other circulatory system procedures Cardiothoracic

Surgery 2

190 Acute myocardial infarction Myocardial Infarction 20

191 Cardiac catheterization w circ disord exc ischemic heart disease Invasive Cardiology 19

192 Cardiac catheterization for ischemic heart disease Invasive Cardiology 19

193 Acute & subacute endocarditis Cardiology 1

194 Heart failure Cardiology 1

196 Cardiac arrest Cardiology 1


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Product Line

197 Peripheral & other vascular disorders General Medicine 11

198 Angina pectoris & coronary atherosclerosis Cardiology 1

199 Hypertension Cardiology 1

200 Cardiac structural & valvular disorders Cardiology 1

201 Cardiac arrhythmia & conduction disorders Cardiology 1

203 Chest pain Cardiology 1

204 Syncope & collapse Cardiology 1

205 Cardiomyopathy Cardiology 1

206 Malfunction,reaction,complication of cardiac/vasc device or procedure Cardiology 1

207 Other circulatory system diagnoses Cardiology 1

220 Major stomach, esophageal & duodenal procedures General Surgery 12

221 Major small & large bowel procedures General Surgery 12

222 Other stomach, esophageal & duodenal procedures General Surgery 12

223 Other small & large bowel procedures General Surgery 12

224 Peritoneal adhesiolysis General Surgery 12

225 Appendectomy General Surgery 12

226 Anal procedures General Surgery 12

227 Hernia procedures except inguinal, femoral & umbilical General Surgery 12

228 Inguinal, femoral & umbilical hernia procedures General Surgery 12

229 Other digestive system & abdominal procedures General Surgery 12

240 Digestive malignancy Oncology 26

241 Peptic ulcer & gastritis Gastroenterology 10

242 Major esophageal disorders Gastroenterology 10

243 Other esophageal disorders Gastroenterology 10

244 Diverticulitis & diverticulosis Gastroenterology 10

245 Inflammatory bowel disease Gastroenterology 10

246 Gastrointestinal vascular insufficiency Gastroenterology 10

247 Intestinal obstruction Gastroenterology 10

248 Major gastrointestinal & peritoneal infections Gastroenterology 10

249 Non-bacterial gastroenteritis, nausea & vomiting Gastroenterology 10

251 Abdominal pain Gastroenterology 10

252 Malfunction, reaction & complication of GI device or procedure Gastroenterology 10

253 Other & unspecified gastrointestinal hemorrhage Gastroenterology 10

254 Other digestive system diagnoses Gastroenterology 10

260 Major pancreas, liver & shunt procedures General Surgery 12

261 Major biliary tract procedures General Surgery 12

262 Cholecystectomy except laparoscopic General Surgery 12


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Product Line

263 Laparoscopic cholecystectomy General Surgery 12

264 Other hepatobiliary, pancreas & abdominal procedures General Surgery 12

279 Hepatic coma & other major acute liver disorders Gastroenterology 10

280 Alcoholic liver disease Gastroenterology 10

281 Malignancy of hepatobiliary system & pancreas Oncology 26

282 Disorders of pancreas except malignancy Gastroenterology 10

283 Other disorders of the liver Gastroenterology 10

284 Disorders of gallbladder & biliary tract Gastroenterology 10

301 Hip joint replacement Orthopedic Surgery 29

302 Knee joint replacement Orthopedic Surgery 29

303 Dorsal & lumbar fusion proc for curvature of back Orthopedic Surgery 29

304 Dorsal & lumbar fusion proc except for curvature of back Orthopedic Surgery 29

305 Amputation of lower limb except toes Orthopedic Surgery 29

308 Hip & femur procedures for trauma except joint replacement Orthopedic Surgery 29

309 Hip & femur procedures for non-trauma except joint replacement Orthopedic Surgery 29

310 Intervertebral disc excision & decompression Orthopedic Surgery 29

312 Skin graft, except hand, for musculoskeletal & connective tissue diagnoses Orthopedic Surgery 29

313 Knee & lower leg procedures except foot Orthopedic Surgery 29

314 Foot & toe procedures Orthopedic Surgery 29

315 Shoulder, upper arm & forearm procedures Orthopedic Surgery 29

316 Hand & wrist procedures Orthopedic Surgery 29

317 Tendon, muscle & other soft tissue procedures Orthopedic Surgery 29

320 Other musculoskeletal system & connective tissue procedures Orthopedic Surgery 29

321 Cervical spinal fusion & other back/neck proc exc disc excis/decomp Spinal Surgery 37

340 Fracture of femur Orthopedics 30

341 Fracture of pelvis or dislocation of hip Orthopedics 30

342 Fractures & dislocations except femur, pelvis & back Orthopedics 30

343 Musculoskeletal malignancy & pathol fracture d/t muscskel malig Oncology 26

344 Osteomyelitis, septic arthritis & other musculoskeletal infections Infectious Disease 17

346 Connective tissue disorders Rheumatology 36

347 Other back & neck disorders, fractures & injuries Orthopedics 30

349 Malfunction, reaction, complic of orthopedic device or procedure Orthopedics 30

351 Other musculoskeletal system & connective tissue diagnoses Rheumatology 36

361 Skin graft for skin & subcutaneous tissue diagnoses General Surgery 12

362 Mastectomy procedures General Surgery 12

363 Breast procedures except mastectomy General Surgery 12


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Product Line

364 Other skin, subcutaneous tissue & related procedures General Surgery 12

380 Skin ulcers Dermatology 4

381 Major skin disorders Dermatology 4

382 Malignant breast disorders Oncology 26

383 Cellulitis & other bacterial skin infections Infectious Disease 17

384 Contusion, open wound & other trauma to skin & subcutaneous tissue Dermatology 4

385 Other skin, subcutaneous tissue & breast disorders Dermatology 4

401 Pituitary & adrenal procedures Endocrinology

Surgery 7

403 Procedures for obesity Endocrinology

Surgery 7

404 Thyroid, parathyroid & thyroglossal procedures Endocrinology

Surgery 7

405 Other procedures for endocrine, nutritional & metabolic disorders Endocrinology

Surgery 7

420 Diabetes Diabetes 5

421 Malnutrition, failure to thrive & other nutritional disorders Endocrinology 6

422 Hypovolemia & related electrolyte disorders Endocrinology 6

423 Inborn errors of metabolism Endocrinology 6

424 Other endocrine disorders Endocrinology 6

425 Electrolyte disorders except hypovolemia related Endocrinology 6

440 Kidney transplant Transplant Surgery 40

441 Major bladder procedures Urological Surgery 42

442 Kidney & urinary tract procedures for malignancy Oncology 26

443 Kidney & urinary tract procedures for nonmalignancy Urological Surgery 42

444 Renal dialysis access device procedure only Urological Surgery 42

445 Other bladder procedures Urological Surgery 42

446 Urethral & transurethral procedures Urological Surgery 42

447 Other kidney, urinary tract & related procedures Urological Surgery 42

460 Renal failure Nephrology 22

461 Kidney & urinary tract malignancy Oncology 26

462 Nephritis & nephrosis Nephrology 22

463 Kidney & urinary tract infections Nephrology 22

465 Urinary stones & acquired upper urinary tract obstruction Urology 43

466 Malfunction, reaction, complic of genitourinary device or proc Nephrology 22

468 Other kidney & urinary tract diagnoses, signs & symptoms Nephrology 22

480 Major male pelvic procedures Urological Surgery 42


17


Product Line

481 Penis procedures Urological Surgery 42

482 Transurethral prostatectomy Urological Surgery 42

483 Testes & scrotal procedures Urological Surgery 42

484 Other male reproductive system & related procedures General Surgery 12

500 Malignancy, male reproductive system Oncology 26

501 Male reproductive system diagnoses except malignancy Urology 43

510 Pelvic evisceration, radical hysterectomy & other radical GYN procs Gynecological Surg 13

511 Uterine & adnexa procedures for ovarian & adnexal malignancy Oncology 26

512 Uterine & adnexa procedures for non-ovarian & non-adnexal malig Oncology 26

513 Uterine & adnexa procedures for non-malignancy except leiomyoma Gynecological Surg 13

514 Female reproductive system reconstructive procedures Gynecological Surg 13

517 Dilation & curettage for non-obstetric diagnoses Gynecological Surg 13

518 Other female reproductive system & related procedures Gynecological Surg 13

519 Uterine & adnexa procedures for leiomyoma Gynecological Surg 13

530 Female reproductive system malignancy Oncology 26

531 Female reproductive system infections Gynecology 14

532 Menstrual & other female reproductive system disorders Gynecology 14

540 Cesarean delivery Obstetrics/Delivery 25

541 Vaginal delivery w sterilization &/or D&C Obstetrics/Delivery 25

542 Vaginal delivery w complicating procedures exc sterilization &/or D&C Obstetrics/Delivery 25

544 D&C, aspiration curettage or hysterotomy for obstetric diagnoses Other Obstetrics 31

545 Ectopic pregnancy procedure Gynecological Surg 13

546 Other O.R. proc for obstetric diagnoses except delivery diagnoses Other Obstetrics 31

560 Vaginal delivery Obstetrics/Delivery 25

561 Postpartum & post abortion diagnoses w/o procedure Other Obstetrics 31

563 Threatened abortion Other Obstetrics 31

564 Abortion w/o D&C, aspiration curettage or hysterotomy Other Obstetrics 31

565 False labor Other Obstetrics 31

566 Other antepartum diagnoses Other Obstetrics 31

580 Neonate, transferred <5 days old, not born here Neonatology 21

581 Neonate, transferred < 5 days old, born here Neonatology 21

583 Neonate w ECMO Neonatology 21

588 Neonate bwt <1500g w major procedure Neonatology 21

589 Neonate bwt <500g Neonatology 21

591 Neonate birthwt 500-749g w/o major procedure Neonatology 21

593 Neonate birthwt 750-999g w/o major procedure Neonatology 21

602 Neonate bwt 1000-1249g w resp dist synd/oth maj resp or maj anom Neonatology 21


18


Product Line

603 Neonate birthwt 1000-1249g w or w/o other significant condition Neonatology 21

607 Neonate bwt 1250-1499g w resp dist synd/oth maj resp or maj anom Neonatology 21

608 Neonate bwt 1250-1499g w or w/o other significant condition Neonatology 21

609 Neonate bwt 1500-2499g w major procedure Neonatology 21

611 Neonate birthwt 1500-1999g w major anomaly Neonatology 21

612 Neonate bwt 1500-1999g w resp dist synd/oth maj resp cond Neonatology 21

613 Neonate birthwt 1500-1999g w congenital/perinatal infection Neonatology 21

614 Neonate bwt 1500-1999g w or w/o other significant condition Neonatology 21

621 Neonate bwt 2000-2499g w major anomaly Neonatology 21

622 Neonate bwt 2000-2499g w resp dist synd/oth maj resp cond Neonatology 21

623 Neonate bwt 2000-2499g w congenital/perinatal infection Neonatology 21

625 Neonate bwt 2000-2499g w other significant condition Neonatology 21

626 Neonate bwt 2000-2499g, normal newborn or neonate w other problem Neonatology 21

630 Neonate birthwt >2499g w major cardiovascular procedure Neonatology 21

631 Neonate birthwt >2499g w other major procedure Neonatology 21

633 Neonate birthwt >2499g w major anomaly Neonatology 21

634 Neonate, birthwt >2499g w resp dist synd/oth maj resp cond Neonatology 21

636 Neonate birthwt >2499g w congenital/perinatal infection Neonatology 21

639 Neonate birthwt >2499g w other significant condition Neonatology 21

640 Neonate birthwt >2499g, normal newborn or neonate w other problem Normal Newborn 48

650 Splenectomy General Surgery 12

651 Other procedures of blood & blood-forming organs General Surgery 12

660 Major hematologic/immunologic diag exc sickle cell crisis & coagul Hematology 15

661 Coagulation & platelet disorders Hematology 15

662 Sickle cell anemia crisis Hematology 15

663 Other anemia & disorders of blood & blood-forming organs Hematology 15

680 Major O.R. procedures for lymphatic/hematopoietic/other neoplasms General Surgery 12

681 Other O.R. procedures for lymphatic/hematopoietic/other neoplasms General Surgery 12

690 Acute leukemia Oncology 26

691 Lymphoma, myeloma & non-acute leukemia Oncology 26

692 Radiotherapy Oncology 26

693 Chemotherapy Oncology 26

694 Lymphatic & other malignancies & neoplasms of uncertain behavior Oncology 26

710 Infectious & parasitic diseases including HIV w O.R. procedure General Surgery 12

711 Post-op, post-trauma, other device infections w O.R. procedure General Surgery 12

720 Septicemia & disseminated infections Infectious Disease 17

721 Post-operative, post-traumatic, other device infections General Surgery 12


19


Product Line

722 Fever Infectious Disease 17

723 Viral illness Infectious Disease 17

724 Other infectious & parasitic diseases Infectious Disease 17

740 Mental illness diagnosis w O.R. procedure General Surgery 12

750 Schizophrenia Psychiatry 33

751 Major depressive disorders & other/unspecified psychoses Psychiatry 33

752 Disorders of personality & impulse control Psychiatry 33

753 Bipolar disorders Psychiatry 33

754 Depression except major depressive disorder Psychiatry 33

755 Adjustment disorders & neuroses except depressive diagnoses Psychiatry 33

756 Acute anxiety & delirium states Psychiatry 33

757 Organic mental health disturbances Psychiatry 33

758 Childhood behavioral disorders Psychiatry 33

759 Eating disorders Psychiatry 33

760 Other mental health disorders Psychiatry 33

770 Drug & alcohol abuse or dependence, left against medical advice Substance Abuse 38

772 Alcohol & drug dependence w rehab or rehab/detox therapy Substance Abuse 38

773 Opioid abuse & dependence Substance Abuse 38

774 Cocaine abuse & dependence Substance Abuse 38

775 Alcohol abuse & dependence Substance Abuse 38

776 Other drug abuse & dependence Substance Abuse 38

791 O.R. procedure for other complications of treatment Injuries/complic. of

prior care 18

811 Allergic reactions General Medicine 11

812 Poisoning of medicinal agents General Medicine 11

813 Other complications of treatment Injuries/complic. of

prior care 18

815 Other injury, poisoning & toxic effect diagnoses General Medicine 11

816 Toxic effects of non-medicinal substances General Medicine 11

841 Extensive 3rd degree burns w skin graft General Medicine 11

842 Full thickness burns w skin graft General Medicine 11

843 Extensive 3rd degree or full thickness burns w/o skin graft General Medicine 11

844 Partial thickness burns w or w/o skin graft General Medicine 11

850 Procedure w diag of rehab, aftercare or oth contact w health service General Surgery 12

860 Rehabilitation Rehabilitation 35

861 Signs, symptoms & other factors influencing health status General Medicine 11

862 Other aftercare & convalescence General Medicine 11


20


Product Line

863 Neonatal aftercare General Medicine 11

890 HIV w multiple major HIV related conditions HIV 16

892 HIV w major HIV related condition HIV 16

893 HIV w multiple significant HIV related conditions HIV 16

894 HIV w one signif HIV cond or w/o signif related cond HIV 16

910 Craniotomy for multiple significant trauma Trauma 41

911 Extensive abdominal/thoracic procedures for mult significant trauma Trauma 41

912 Musculoskeletal & other procedures for multiple significant trauma Trauma 41

930 Multiple significant trauma w/o O.R. procedure Trauma 41

950 Extensive procedure unrelated to principal diagnosis General Surgery 12

951 Moderately extensive procedure unrelated to principal diagnosis General Surgery 12

952 Nonextensive procedure unrelated to principal diagnosis General Surgery 12

955 Invalid Invalid 46

956 Ungroupable Ungroupable 47


21

Appendix II: Outpatient Service Line Assignment Hierarchy

Because definitions of outpatient services lines are not widely used, HSCRC used an inpatient-

like logic to assign outpatient visits to service lines based upon the reasons for acquiring

services. For example, all services provided for ED patients are grouped under the ED service

line. The following hierarchy is used for these classifications:

1. Radiation Therapy/Infusion/Chemotherapy/Oncology: This includes patient

records where the following radiation and chemotherapy EAPGs (1, 340, 341, 342,

343, 344, 345, 346, 347, 348, 349, 431, 432, 433, 434, 441, 443, 460,461, 462, 463,

464, 465, 476, 477, 478, 482, 483, 484, 802, and 803) show radiology charges

(rctchg45 & rctchg46) exceeding operating room charges (rctchg40). This also

includes patient records where infusion EAPGs (110, 111,117) show operating room

charges (rctchg40) that are less than drug charge (rctchg67). To be included in this

classification, these patient records should display zero charges for emergency

services, free standing emergency services, or trauma.

2. ED: This includes patient records where emergency (rctchg28), free standing center

(rctchg34), or trauma resuscitation rate center charges (rctchg90) are greater than

zero. In addition, it includes all ED free-standing center (Queen Anne, Bowie Health,

and Germantown) services.

3. Drug: This includes patient records where EAPGs are assigned to a drug service line.

4. Major Surgery: This includes patient records where EAPGs are assigned to a major

surgery service line.

5. Cardiovascular: This includes patient records where EAPGs are assigned to a

cardiovascular service line.

6. Minor Surgery: This includes patient records where EAPGs are assigned to a minor

surgery service line.

7. Psychiatry: This includes patient records where EAPGs are assigned to a psychiatry

service line.

8. Rehab & Therapy: This includes cases where EAPGs are assigned to a rehabilitation

and therapy service line.

9. Clinic: This includes patient records where clinic (rctchg29), clinic services primary

(rctchg30), oncology clinic (rctchg35), operating room clinic (rctchg79), University

of Maryland Shock Trauma clinic (rctchg81), or Shock Trauma O/P (rctchg37) are

greater than zero.

10. Unassigned: This includes patient records where the high weight EAPG equals zero.

11. Other: Patient records where EAPGs are assigned various services: other, lab,

pathology, CT/MRI/PET, or radiology.

Note: Rctchg=Rate Center Charge


22

Appendix III: 30-Day Readmission Definition Overview

Readmissions are excluded from the market shift calculation. The methodology for the

readmission indicator is based on definitions in the Maryland Readmission Reduction Incentive

Program. Readmissions are based on 30-day all-payer all-hospital (both intra and inter hospital)

readmission rates. The readmission logic includes both inpatient and observation stays with a

length of stay of 24 or more hours.

The following exclusions are applied for CY 2015:

Planned readmissions are excluded from the numerator based upon the CMS Planned

Readmission Algorithm V. 3. The HSCRC also added all vaginal and C-section deliveries

as planned using the APR-DRGs, rather than principal diagnosis (APR-DRGs 540, 541,

542, 560). Planned admissions are counted in the denominator because they could have

an unplanned readmission.

All newborn APR-DRG discharges are NOT eligible for a readmission.

A hospitalization within 30 days of a hospital discharge where a patient dies is counted as

a readmission; however, the readmission is removed from the denominator because there

cannot be a subsequent readmission.

Admissions that result in transfers, defined as cases where the discharge date of the

admission is on the same day as the subsequent admission, are removed from the

denominator counts. Thus, only one admission is counted in the denominator, and that is

the admission to the transfer hospital. The discharge date is used to calculate the 30-day

readmission window.

o In addition the following data cleaning edits are applied:

Cases with null or missing Chesapeake Regional Information System

unique patient identifiers (CRISP EIDs) are excluded.

Duplicates are removed.

Cases with negative interval days are removed.

HSCRC staff is revising case-mix data edits to prevent submission of duplicates and negative

intervals, which are very rare. In addition, CRISP EID matching benchmarks are closely

monitored. Currently, ninety-nine percent of inpatient discharges have a CRISP EID.


23

Appendix IV: PQI Overview

PQIs are a set of measures that can be used with hospital inpatient discharge data to identify

quality of care for “ambulatory care sensitive conditions.” These are conditions for which good

outpatients care can potentially prevent the need for hospitalization, or for which early

intervention can prevent complications or more severe disease. PQIs are population based and

adjusted for factors such as age and severity of illness.

PQIs are excluded from the market shift calculation. PQIs include discharges for patients aged

18 years and older, that meet the numerator criteria in any of the following measures:

PQI #1 Diabetes Short-Term Complications

PQI #3 Diabetes Long-Term Complications

PQI #5 Chronic Obstructive Pulmonary Disease (COPD) or Asthma in Older Adults

PQI #7 Hypertension

PQI #8 Heart Failure

PQI #10 Dehydration

PQI #11 Bacterial Pneumonia

PQI #12 Urinary Tract Infection

PQI #13 Angina Without Procedure

PQI #14 Uncontrolled Diabetes

PQI #15 Asthma in Younger Adults Admission Rate

PQI #16 Lower-Extremity Amputation among Patients with Diabetes

Discharges that meet the inclusion and exclusion rules for the numerator in more than one of the

above PQIs are counted only once in the composite numerator. Additional information on the

PQI definitions can be accessed at:

http://www.qualityindicators.ahrq.gov/modules/pqi_resources.aspx


24

Appendix V: Categorical Case Exclusions

Categorical cases represent the most specialized services received at academic medical centers

and are excluded from the market shift calculation. The following list summarizes the categorical

case exclusions:

1. Categorical Case Exclusions

1.1. Solid Organ Transplants - APR-DRGS = 001, 002, 003, 006 or 440

(any procedure = 5280, 5282, or 5283; or any procedure = 5280, 5282, 5283,

4100, 4101, 4102, 4103, 4104, 4105, 4106, 4107, 4108 or 3751; Heart

Transplantation 4109 or 336 or 3350 , 3351, 3352, 5569, 5561, 5281, 5051, or

5059)

1.2. Melodysplastic - Any Diagnosis = 2387 for Johns Hopkins Oncology Center

1.3. Johns Hopkins Pediatric Burn Cases (Age < 18) - 3rd Degree Burns

1.4. Johns Hopkins and University of Maryland Oncology Center:

1.4.1. Transplant Cases (Reserve Flag = 1)

1.4.2. Research Cases (Reserve Flag = 2)

1.4.3. Hematological Cases (Reserve Flag = 3)

1.4.4. Transfer in Cases (Reserve Flag = 4)

1.5. Northwest Hospital hospice cases- (Dailyservice=10)


25

Appendix VI: Steps for Calculating APR-DRG Weights

The Creation of Maryland Hospital-Specific Relative Weights for Inpatient Services

Relative weights are measures of relative cost or resources needed to treat a mix of patients at a

given Maryland hospital using specific APR-DRG/severity of illness levels. In addition, they

identify how resource needs vary across groups of patients and hospitals. The case-mix index

(CMI) is the average value of the relative weights for the patients at a given hospital.

The calculation of relative weights used by Maryland hospitals, since the adoption of the APR-

DRG Grouper, are as follows:

1. Remove excluded cases from the data.

2. Use the outlier trim methodology to adjust charges for outlier cases so that the maximum

charge equals the trim limit (as described in the section “Steps in Determining Outliers”).

3. Calculate an average charge per case in each APR-DRG/severity category.

4. Calculate a statewide average charge per case (CPC).

5. Divide the cell average by the statewide average to generate the cell weight.

6. Calculate hospital-specific relative weights as follows:

a. For each hospital i, calculate the average charge per case-mix adjusted discharge:

C(i).

b. For the state as a whole, calculate the average charge per case-mix adjusted

discharge: C.

c. For each hospital, calculate a standardizing factor: S(i) = C(i) / C.

d. For each hospital, adjust its charges to the state level by dividing by S(i).

e. Recalculate the case-mix weights using the standardized charges.

f. Go back to step 6a and repeat until the changes in weights are minimal or non-

existent.

7. Calculate the average weight per APR-DRG/severity category.

8. Adjust the weights in low volume cells (cells with less than 30 cases) by blending the

average weight per APR-DRG/severity category in step 7 with the 3M National Relative

Weights.

9. Adjust the weights to be monotonically increasing by severity of illness.

10. Normalize the weights to a statewide CMI of 1.00.

The “Outlier Trim” methodology by itself is almost as elaborate as the one described above and

follows similar processes of determination.

Steps in Determining Outliers

Table 1 provides the steps in calculating each hospital’s trim points and outlier cases. Additional

details are provided to better understand each step of the process.


26

Table 1. Outlier Methodology

Hospital-Specific Outliers and Trim Details

1. Remove all categorical exclusions from the

case-mix data. This includes research, organ transplants, and pediatric burn cases, for example.

2. Create a statewide charge-based weight:

Divide each APR-DRG SOI average charge by

the statewide average charge.

Uses the geometric mean for charges instead of the arithmetic mean to limit the effect of extreme charges.

3. Adjust the statewide APR-DRG SOI

weights: Use 3M’s National Monotonic

Relative Weights data to adjust relative

weights so they monotonically increase by

SOI; the weights are then normalized to the

statewide CMI to 1.00.

This step ensures that the charges increase

along with severity. The national file is also

used to adjust weights for small case counts

(<30), which can be statistically unstable.

4. Set each hospital’s APR-DRG SOI high trim

threshold: Adjust each hospital’s CPC by the

hospital base CMI, multiply by the

statewide APR-DRG SOI weight, then

multiply by 3.5155.

Trim points are set specifically for each

hospital. In 2006, it was determined that the

outlier threshold was 3.5155 times the

approved charges. The multiplier of 3.5155

was adopted in the final July 2006 outlier

methodology.

5. Adjust each APR-DRG SOI high trim cell for

the dead-zone: A minimum $10,000 loss

and a maximum of $100,000.

Each trim point must be at least $10,000

above the approved CPC, but not more than

$100,000 above.

6. Charges above the high outlier threshold

are trimmed: Charges in excess of the

threshold (based on unit rates) are excluded

for CPC/CPE target setting (step 7).

The outlier cases are still included in the

calculations with their charges reduced to the

trim point.

7. Hospital CPC/CPE(s) are revised: To reflect

high outlier trimmed charges and are

revenue neutral at the base.

Trim points are set prospectively based on the

prior year and are rebased at the beginning of

each rate year. At this point, they are revenue

neutral, and will remain this way if the

number and case-mix remain constant.

Tables 2 and 3 show outlier calculation examples from real HSCRC data. Hospital A is a higher

charge hospital, while hospital B is a lower charge hospital.


27

Table 2. Hospital A's High Trim Limits for APR-DRG 4 (TRACHEOSTOMY W MV 96+ HOURS W EXTENSIVE PROCEDURE OR ECMO) by Severity Levels

Severity Code

CPC Target CMI

High Limit Multiplier

Trim Weight

Approved Charges

Initial Trim point

Diff. between Approved Charges & Initial Trim

Point Maximum Trim

Point

Determine if using Initial Trim Point or

Maximum Final High Trim

Limit

B C D E F G=(C/D)*F H=(C/D)*E*F I=H-G K=G+100,000 L=IF((I>=100,000),K,

ELSE ,H,)) M=MAX(L,J)

1

$24,543 1.346957 3.5155

7.167022 $130,591 $459,092 $328,501 $230,591 $230,591 $230,591

2 9.690092 $176,564 $620,710 $444,146 $276,564 $276,564 $276,564

3 11.003101 $200,488 $704,817 $504,328 $300,488 $300,488 $300,488

4 18.136112 $330,459 $1,161,730 $831,271 $430,459 $430,459 $430,459

Table 3. Hospital B's High Trim Limits for APR-DRG 4 (TRACHEOSTOMY W MV 96+ HOURS W EXTENSIVE PROCEDURE OR ECMO) by Severity Levels

Severity Code

CPC Target CMI

High Limit Multiplier

Trim Weight

Approved Charges

Initial Trim point

Diff. between Approved Charges & Initial Trim

Point Maximum Trim

Point

Determine if using Initial Trim Point or

Maximum Final High Trim

Limit

B C D E F G=(C/D)*F H=(C/D)*E*F I=H-G K=G+100,000 L=IF((I>=100,000),K,

ELSE ,H,)) M=MAX(L,J)

1

$10,306 0.818111 3.5155

7.167022 $90,285 $317,398 $227,112 $190,285 $190,285 $190,285

2 9.690092 $122,069 $429,134 $307,065 $222,069 $222,069 $222,069

3 11.003101 $138,610 $487,282 $348,672 $238,610 $238,610 $238,610

4 18.136112 $228,466 $803,173 $574,707 $328,466 $328,466 $328,466


28

Appendix VII: EAPG Service Line Map (EAPG version 3.8)

The following table summarizes the codes used to map EAPGs outpatient service lines.

EAPG EAPG Description Service Line

1 PHOTOCHEMOTHERAPY Minor Surgery

2 SUPERFICIAL NEEDLE BIOPSY AND ASPIRATION Other

3 LEVEL I SKIN INCISION AND DRAINAGE Minor Surgery

4 LEVEL II SKIN INCISION AND DRAINAGE Major Surgery

5 NAIL PROCEDURES Minor Surgery

6 LEVEL I SKIN DEBRIDEMENT AND DESTRUCTION Minor Surgery

7 LEVEL II SKIN DEBRIDEMENT AND DESTRUCTION Major Surgery

8 LEVEL III SKIN DEBRIDEMENT AND DESTRUCTION Major Surgery

9 LEVEL I EXCISION AND BIOPSY OF SKIN AND SOFT TISSUE Minor Surgery

10 LEVEL II EXCISION AND BIOPSY OF SKIN AND SOFT TISSUE Major Surgery

11 LEVEL III EXCISION AND BIOPSY OF SKIN AND SOFT TISSUE Major Surgery

12 LEVEL I SKIN REPAIR Minor Surgery

13 LEVEL II SKIN REPAIR Major Surgery

14 LEVEL III SKIN REPAIR Major Surgery

15 LEVEL IV SKIN REPAIR Major Surgery

20 LEVEL I BREAST PROCEDURES Minor Surgery

21 LEVEL II BREAST PROCEDURES Major Surgery

22 LEVEL III BREAST PROCEDURES Major Surgery

30 LEVEL I MUSCULOSKELETAL PROCEDURES EXCLUDING HAND AND FOOT Minor Surgery

31 LEVEL II MUSCULOSKELETAL PROCEDURES EXCLUDING HAND AND FOOT Major Surgery

32 LEVEL III MUSCULOSKELETAL PROCEDURES EXCLUDING HAND AND FOOT Major Surgery

33 LEVEL I HAND PROCEDURES Minor Surgery

34 LEVEL II HAND PROCEDURES Major Surgery

35 LEVEL I FOOT PROCEDURES Major Surgery

36 LEVEL II FOOT PROCEDURES Major Surgery

37 LEVEL I ARTHROSCOPY Major Surgery

38 LEVEL II ARTHROSCOPY Major Surgery

39 REPLACEMENT OF CAST Other

40 SPLINT, STRAPPING AND CAST REMOVAL Other

41 CLOSED TREATMENT FX & DISLOCATION OF FINGER, TOE & TRUNK Major Surgery

42 CLOSED TREATMENT FX & DISLOCATION EXC FINGER, TOE & TRUNK Major Surgery

43 OPEN OR PERCUTANEOUS TREATMENT OF FRACTURES Major Surgery

44 BONE OR JOINT MANIPULATION UNDER ANESTHESIA Major Surgery

45 BUNION PROCEDURES Major Surgery

46 LEVEL I ARTHROPLASTY Major Surgery

47 LEVEL II ARTHROPLASTY Major Surgery


29


48 HAND AND FOOT TENOTOMY Major Surgery

49 ARTHROCENTESIS AND LIGAMENT OR TENDON INJECTION Minor Surgery

60 PULMONARY TESTS Other

61 NEEDLE AND CATHETER BIOPSY, ASPIRATION, LAVAGE AND INTUBATION Minor Surgery

62 LEVEL I ENDOSCOPY OF THE UPPER AIRWAY Minor Surgery

63 LEVEL II ENDOSCOPY OF THE UPPER AIRWAY Major Surgery

64 ENDOSCOPY OF THE LOWER AIRWAY Major Surgery

65 RESPIRATORY THERAPY Other

66 PULMONARY REHABILITATION Rehabilitation

67 VENTILATION ASSISTANCE AND MANAGEMENT Other

80 EXERCISE TOLERANCE TESTS Cardiovascular

81 ECHOCARDIOGRAPHY Cardiovascular

82 CARDIAC ELECTROPHYSIOLOGIC TESTS AND MONITORING Cardiovascular

83 PLACEMENT OF TRANSVENOUS CATHETERS Cardiovascular

84 DIAGNOSTIC CARDIAC CATHETERIZATION Cardiovascular

85 ANGIOPLASTY AND TRANSCATHETER PROCEDURES Cardiovascular

86 PACEMAKER INSERTION AND REPLACEMENT Cardiovascular

87 REMOVAL AND REVISION OF PACEMAKER AND VASCULAR DEVICE Cardiovascular

88 LEVEL I CARDIOTHORACIC PROCEDURES W OR W/O VASCULAR DEVICE Cardiovascular

89 LEVEL II CARDIOTHORACIC PROCEDURES W OR W/O VASCULAR DEVICE Cardiovascular

90 SECONDARY VARICOSE VEINS AND VASCULAR INJECTION Cardiovascular

91 VASCULAR LIGATION AND RECONSTRUCTION Cardiovascular

92 RESUSCITATION Cardiovascular

93 CARDIOVERSION Cardiovascular

94 CARDIAC REHABILITATION Cardiovascular

95 THROMBOLYSIS Cardiovascular

96 ATRIAL AND VENTRICULAR RECORDING AND PACING Cardiovascular

97 AICD IMPLANT Cardiovascular

110 PHARMACOTHERAPY BY EXTENDED INFUSION Minor Surgery

111 PHARMACOTHERAPY EXCEPT BY EXTENDED INFUSION Minor Surgery

112 PHLEBOTOMY Other

113 LEVEL I BLOOD AND BLOOD PRODUCT EXCHANGE Other

114 LEVEL II BLOOD AND BLOOD PRODUCT EXCHANGE Other

115 DEEP LYMPH STRUCTURE AND THYROID PROCEDURES Minor Surgery

116 ALLERGY TESTS Other

117 HOME INFUSION Minor Surgery

118 NUTRITION THERAPY Other

130 ALIMENTARY TESTS AND SIMPLE TUBE PLACEMENT Major Surgery

131 ESOPHAGEAL DILATION WITHOUT ENDOSCOPY Minor Surgery

132 ANOSCOPY WITH BIOPSY AND DIAGNOSTIC PROCTOSIGMOIDOSCOPY Minor Surgery


30


133 PROCTOSIGMOIDOSCOPY WITH EXCISION OR BIOPSY Minor Surgery

134 DIAGNOSTIC UPPER GI ENDOSCOPY OR INTUBATION Radiology

135 THERAPEUTIC UPPER GI ENDOSCOPY OR INTUBATION Minor Surgery

136 DIAGNOSTIC LOWER GASTROINTESTINAL ENDOSCOPY Radiology

137 THERAPEUTIC COLONOSCOPY Minor Surgery

138 ERCP AND MISCELLANEOUS GI ENDOSCOPY PROCEDURES Minor Surgery

139 LEVEL I HERNIA REPAIR Minor Surgery

140 LEVEL II HERNIA REPAIR Major Surgery

141 LEVEL I ANAL AND RECTAL PROCEDURES Minor Surgery

142 LEVEL II ANAL AND RECTAL PROCEDURES Major Surgery

143 LEVEL I GASTROINTESTINAL PROCEDURES Minor Surgery

144 LEVEL II GASTROINTESTINAL PROCEDURES Major Surgery

145 LEVEL I LAPAROSCOPY Minor Surgery

146 LEVEL II LAPAROSCOPY Major Surgery

147 LEVEL III LAPAROSCOPY Major Surgery

148 LEVEL IV LAPAROSCOPY Major Surgery

149 SCREENING COLORECTAL SERVICES Clinic

160 EXTRACORPOREAL SHOCK WAVE LITHOTRIPSY Minor Surgery

161 URINARY STUDIES AND PROCEDURES Other

162 URINARY DILATATION Minor Surgery

163 LEVEL I BLADDER AND KIDNEY PROCEDURES Minor Surgery

164 LEVEL II BLADDER AND KIDNEY PROCEDURES Major Surgery

165 LEVEL III BLADDER AND KIDNEY PROCEDURES Major Surgery

166 LEVEL I URETHRA AND PROSTATE PROCEDURES Minor Surgery

167 LEVEL II URETHRA AND PROSTATE PROCEDURES Major Surgery

168 HEMODIALYSIS Other

169 PERITONEAL DIALYSIS Other

180 TESTICULAR AND EPIDIDYMAL PROCEDURES Major Surgery

181 CIRCUMCISION Minor Surgery

182 INSERTION OF PENILE PROSTHESIS Major Surgery

183 OTHER PENILE PROCEDURES Major Surgery

184 DESTRUCTION OR RESECTION OF PROSTATE Major Surgery

185 PROSTATE NEEDLE AND PUNCH BIOPSY Minor Surgery

190 ARTIFICIAL FERTILIZATION Major Surgery

191 LEVEL I FETAL PROCEDURES Other

192 LEVEL II FETAL PROCEDURES Major Surgery

193 TREATMENT OF INCOMPLETE ABORTION Major Surgery

194 THERAPEUTIC ABORTION Major Surgery

195 VAGINAL DELIVERY Major Surgery

196 LEVEL I FEMALE REPRODUCTIVE PROCEDURES Minor Surgery


31


197 LEVEL II FEMALE REPRODUCTIVE PROCEDURES Major Surgery

198 LEVEL III FEMALE REPRODUCTIVE PROCEDURES Major Surgery

199 DILATION AND CURETTAGE Minor Surgery

200 HYSTEROSCOPY Major Surgery

201 COLPOSCOPY Other

210 EXTENDED EEG STUDIES Other

211 ELECTROENCEPHALOGRAM Other

212 ELECTROCONVULSIVE THERAPY Other

213 NERVE AND MUSCLE TESTS Other

214 NERVOUS SYSTEM INJECTIONS, STIMULATIONS OR CRANIAL TAP Radiology

215 LEVEL I REVISION OR REMOVAL OF NEUROLOGICAL DEVICE Minor Surgery

216 LEVEL II REVISION OR REMOVAL OF NEUROLOGICAL DEVICE Major Surgery

217 LEVEL I NERVE PROCEDURES Major Surgery

218 LEVEL II NERVE PROCEDURES Major Surgery

219 SPINAL TAP Major Surgery

220 INJECTION OF ANESTHETIC AND NEUROLYTIC AGENTS Major Surgery

221 LAMINOTOMY AND LAMINECTOMY Major Surgery

222 SLEEP STUDIES Other

223 LEVEL III NERVE PROCEDURES Major Surgery

224 LEVEL IV NERVE PROCEDURES Major Surgery

230 MINOR OPHTHALMOLOGICAL TESTS AND PROCEDURES Minor Surgery

231 FITTING OF CONTACT LENSES Other

232 LASER EYE PROCEDURES Major Surgery

233 CATARACT PROCEDURES Major Surgery

234 LEVEL I ANTERIOR SEGMENT EYE PROCEDURES Major Surgery

235 LEVEL II ANTERIOR SEGMENT EYE PROCEDURES Major Surgery

236 LEVEL III ANTERIOR SEGMENT EYE PROCEDURES Major Surgery

237 LEVEL I POSTERIOR SEGMENT EYE PROCEDURES Major Surgery

238 LEVEL II POSTERIOR SEGMENT EYE PROCEDURES Major Surgery

239 STRABISMUS AND MUSCLE EYE PROCEDURES Major Surgery

240 LEVEL I REPAIR AND PLASTIC PROCEDURES OF EYE Major Surgery

241 LEVEL II REPAIR AND PLASTIC PROCEDURES OF EYE Major Surgery

250 COCHLEAR DEVICE IMPLANTATION Major Surgery

251 OTORHINOLARYNGOLOGIC FUNCTION TESTS Other

252 LEVEL I FACIAL AND ENT PROCEDURES Minor Surgery

253 LEVEL II FACIAL AND ENT PROCEDURES Major Surgery

254 LEVEL III FACIAL AND ENT PROCEDURES Major Surgery

255 LEVEL IV FACIAL AND ENT PROCEDURES Major Surgery

256 TONSIL AND ADENOID PROCEDURES Minor Surgery

257 AUDIOMETRY Other


32


270 OCCUPATIONAL THERAPY Rehabilitation

271 PHYSICAL THERAPY Physical Therapy

272 SPEECH THERAPY AND EVALUATION Rehabilitation

273 MANIPULATION THERAPY Rehabilitation

274 OCCUPATIONAL/PHYSICAL THERAPY, GROUP Rehabilitation

275 SPEECH THERAPY & EVALUATION, GROUP Rehabilitation

280 VASCULAR RADIOLOGY EXCEPT VENOGRAPHY OF EXTREMITY Radiology

281 MAGNETIC RESONANCE ANGIOGRAPHY - HEAD AND/OR NECK Radiology

282 MAGNETIC RESONANCE ANGIOGRAPHY - CHEST Radiology

283 MAGNETIC RESONANCE ANGIOGRAPHY - OTHER SITES Radiology

284 MYELOGRAPHY Radiology

285 MISCELLANEOUS RADIOLOGICAL PROCEDURES WITH CONTRAST Radiology

286 MAMMOGRAPHY Radiology

287 DIGESTIVE RADIOLOGY Radiology

288 DIAGNOSTIC ULTRASOUND EXCEPT OBSTETRICAL AND VASCULAR OF LOWER EXTREMITIES Radiology

289 VASCULAR DIAGNOSTIC ULTRASOUND OF LOWER EXTREMITIES Radiology

290 PET SCANS CT/MRI/PET

291 BONE DENSITOMETRY Radiology

292 MRI- ABDOMEN CT/MRI/PET

293 MRI- JOINTS CT/MRI/PET

294 MRI- BACK CT/MRI/PET

295 MRI- CHEST CT/MRI/PET

296 MRI- OTHER CT/MRI/PET

297 MRI- BRAIN CT/MRI/PET

298 CAT SCAN BACK CT/MRI/PET

299 CAT SCAN - BRAIN CT/MRI/PET

300 CAT SCAN - ABDOMEN CT/MRI/PET

301 CAT SCAN - OTHER CT/MRI/PET

302 ANGIOGRAPHY, OTHER Radiology

303 ANGIOGRAPHY, CEREBRAL Radiology

310 DEVELOPMENTAL & NEUROPSYCHOLOGICAL TESTING Other

311 FULL DAY PARTIAL HOSPITALIZATION FOR SUBSTANCE ABUSE Psychiatric

312 FULL DAY PARTIAL HOSPITALIZATION FOR MENTAL ILLNESS Psychiatric

313 HALF DAY PARTIAL HOSPITALIZATION FOR SUBSTANCE ABUSE Psychiatric

314 HALF DAY PARTIAL HOSPITALIZATION FOR MENTAL ILLNESS Psychiatric

315 COUNSELLING OR INDIVIDUAL BRIEF PSYCHOTHERAPY Psychiatric

316 INDIVIDUAL COMPREHENSIVE PSYCHOTHERAPY Psychiatric

317 FAMILY PSYCHOTHERAPY Psychiatric

318 GROUP PSYCHOTHERAPY Psychiatric

319 ACTIVITY THERAPY Psychiatric


33


320 CASE MANAGEMENT & TREATMENT PLAN DEVELOPMENT - MENTAL HEALTH OR SUBSTANCE ABUSE Psychiatric

321 CRISIS INTERVENTION Psychiatric

322 MEDICATION ADMINISTRATION & OBSERVATION Psychiatric

323 MENTAL HYGIENE ASSESSMENT Psychiatric

324 MENTAL HEALTH SCREENING & BRIEF ASSESSMENT Psychiatric

327 INTENSIVE OUTPATIENT PSYCHIATRIC TREATMENT Psychiatric

328 DAY REHABILITATION, HALF DAY Rehabilitation

329 DAY REHABILITATION, FULL DAY Rehabilitation

330 LEVEL I DIAGNOSTIC NUCLEAR MEDICINE Radiology

331 LEVEL II DIAGNOSTIC NUCLEAR MEDICINE Radiology

332 LEVEL III DIAGNOSTIC NUCLEAR MEDICINE Radiology

340 THERAPEUTIC NUCLEAR MEDICINE Minor Surgery

341 RADIATION THERAPY AND HYPERTHERMIA Minor Surgery

342 LEVEL I AFTERLOADING BRACHYTHERAPY Minor Surgery

343 RADIATION TREATMENT DELIVERY Minor Surgery

344 INSTILLATION OF RADIOELEMENT SOLUTIONS Minor Surgery

345 HYPERTHERMIC THERAPIES Minor Surgery

346 RADIOSURGERY Minor Surgery

347 HIGH ENERGY NEUTRON RADIATION TREATMENT DELIVERY Minor Surgery

348 PROTON TREATMENT DELIVERY Minor Surgery

349 LEVEL II AFTERLOADING BRACHYTHERAPY Minor Surgery

350 LEVEL I ADJUNCTIVE GENERAL DENTAL SERVICES Other

351 LEVEL II ADJUNCTIVE GENERAL DENTAL SERVICES Other

352 PERIODONTICS Other

353 LEVEL I PROSTHODONTICS, FIXED Other

354 LEVEL II PROSTHODONTICS, FIXED Other

355 LEVEL III PROSTHODONTICS, FIXED Other

356 LEVEL I PROSTHODONTICS, REMOVABLE Other

357 LEVEL II PROSTHODONTICS, REMOVABLE Other

358 LEVEL III PROSTHODONTICS, REMOVABLE Other

359 LEVEL I MAXILLOFACIAL PROSTHETICS Other

360 LEVEL II MAXILLOFACIAL PROSTHETICS Other

361 LEVEL I DENTAL RESTORATIONS Other

362 LEVEL II DENTAL RESTORATIONS Other

363 LEVEL III DENTAL RESTORATION Other

364 LEVEL I ENDODONTICS Other

365 LEVEL II ENDODONTICS Other

366 LEVEL III ENDODONTICS Other

367 LEVEL I ORAL AND MAXILLOFACIAL SURGERY Minor Surgery

368 LEVEL II ORAL AND MAXILLOFACIAL SURGERY Major Surgery


34


369 LEVEL III ORAL AND MAXILLOFACIAL SURGERY Major Surgery

370 LEVEL IV ORAL AND MAXILLOFACIAL SURGERY Major Surgery

371 ORTHODONTICS Other

372 SEALANT Other

373 LEVEL I DENTAL FILM Other

374 LEVEL II DENTAL FILM Other

375 DENTAL ANESTHESIA Other

376 DIAGNOSTIC DENTAL PROCEDURES Minor Surgery

377 PREVENTIVE DENTAL PROCEDURES Clinic

380 ANESTHESIA Other

390 LEVEL I PATHOLOGY Pathology

391 LEVEL II PATHOLOGY Pathology

392 PAP SMEARS Pathology

393 BLOOD AND TISSUE TYPING Lab

394 LEVEL I IMMUNOLOGY TESTS Lab

395 LEVEL II IMMUNOLOGY TESTS Lab

396 LEVEL I MICROBIOLOGY TESTS Lab

397 LEVEL II MICROBIOLOGY TESTS Lab

398 LEVEL I ENDOCRINOLOGY TESTS Lab

399 LEVEL II ENDOCRINOLOGY TESTS Lab

400 LEVEL I CHEMISTRY TESTS Lab

401 LEVEL II CHEMISTRY TESTS Lab

402 BASIC CHEMISTRY TESTS Lab

403 ORGAN OR DISEASE ORIENTED PANELS Lab

404 TOXICOLOGY TESTS Lab

405 THERAPEUTIC DRUG MONITORING Lab

406 LEVEL I CLOTTING TESTS Lab

407 LEVEL II CLOTTING TESTS Lab

408 LEVEL I HEMATOLOGY TESTS Lab

409 LEVEL II HEMATOLOGY TESTS Lab

410 URINALYSIS Lab

411 BLOOD AND URINE DIPSTICK TESTS Lab

412 SIMPLE PULMONARY FUNCTION TESTS Other

413 CARDIOGRAM Other

414 LEVEL I IMMUNIZATION Other

415 LEVEL II IMMUNIZATION Other

416 LEVEL III IMMUNIZATION Other

417 MINOR REPRODUCTIVE PROCEDURES Minor Surgery

418 MINOR CARDIAC AND VASCULAR TESTS Other

419 MINOR OPHTHALMOLOGICAL INJECTION, SCRAPING AND TESTS Other


35


420 PACEMAKER AND OTHER ELECTRONIC ANALYSIS Other

421 TUBE CHANGE Other

422 PROVISION OF VISION AIDS Other

423 INTRODUCTION OF NEEDLE AND CATHETER Other

424 DRESSINGS AND OTHER MINOR PROCEDURES Minor Surgery

425 OTHER MISCELLANEOUS ANCILLARY PROCEDURES Other

426 PSYCHOTROPIC MEDICATION MANAGEMENT Other

427 BIOFEEDBACK AND OTHER TRAINING Other

428 PATIENT EDUCATION, INDIVIDUAL Other

429 PATIENT EDUCATION, GROUP Other

430 CLASS I CHEMOTHERAPY DRUGS Minor Surgery

431 CLASS II CHEMOTHERAPY DRUGS Minor Surgery

432 CLASS III CHEMOTHERAPY DRUGS Minor Surgery

433 CLASS IV CHEMOTHERAPY DRUGS Minor Surgery

434 CLASS V CHEMOTHERAPY DRUGS Minor Surgery

435 CLASS I PHARMACOTHERAPY Drugs

436 CLASS II PHARMACOTHERAPY Drugs

437 CLASS III PHARMACOTHERAPY Drugs

438 CLASS IV PHARMACOTHERAPY Drugs

439 CLASS V PHARMACOTHERAPY Drugs

440 CLASS VI PHARMACOTHERAPY Drugs

441 CLASS VI CHEMOTHERAPY DRUGS Minor Surgery

443 CLASS VII CHEMOTHERAPY DRUGS Minor Surgery

444 CLASS VII PHARMACOTHERAPY Drugs

448 EXPANDED HOURS ACCESS Other

449 ADDITIONAL UNDIFFERENTIATED MEDICAL VISITS/SERVICES Other

450 OBSERVATION Other

451 SMOKING CESSATION TREATMENT Other

452 DIABETES SUPPLIES Other

453 MOTORIZED WHEELCHAIR Other

454 TPN FORMULAE Other

455 IMPLANTED TISSUE OF ANY TYPE Other

456 MOTORIZED WHEELCHAIR ACCESSORIES Other

457 VENIPUNCTURE Other

458 ALLERGY THERAPY Other

459 VACCINE ADMINISTRATION Other

460 CLASS VIII COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY Minor Surgery

461 CLASS IX COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY Minor Surgery

462 CLASS X COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY Minor Surgery

463 CLASS XI COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY Minor Surgery


36


464 CLASS XII COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY Minor Surgery

465 CLASS XIII COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY Minor Surgery

470 OBSTETRICAL ULTRASOUND Radiology

471 PLAIN FILM Radiology

472 ULTRASOUND GUIDANCE Radiology

473 CT GUIDANCE CT/MRI/PET

474 RADIOLOGICAL GUIDANCE FOR THERAPEUTIC OR DIAGNOSTIC PROCEDURES Radiology

475 MRI GUIDANCE CT/MRI/PET

476 LEVEL I THERAPEUTIC RADIATION TREATMENT PREPARATION Minor Surgery

477 LEVEL II THERAPEUTIC RADIATION TREATMENT PREPARATION Minor Surgery

478 MEDICAL RADIATION PHYSICS Minor Surgery

479 TREATMENT DEVICE DESIGN AND CONSTRUCTION Radiology

480 TELETHERAPY/BRACHYTHERAPY CALCULATION Radiology

481 THERAPEUTIC RADIOLOGY SIMULATION FIELD SETTING Radiology

482 RADIOELEMENT APPLICATION Minor Surgery

483 RADIATION THERAPY MANAGEMENT Minor Surgery

484 THERAPEUTIC RADIOLOGY TREATMENT PLANNING Minor Surgery

485 CORNEAL TISSUE PROCESSING Other

490 INCIDENTAL TO MEDICAL, SIGNIFICANT PROCEDURE OR THERAPY VISIT Other

491 MEDICAL VISIT INDICATOR Other

492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR Other

495 MINOR CHEMOTHERAPY DRUGS Minor Surgery

496 MINOR PHARMACOTHERAPY Drugs

500 ENCOUNTER/REFERRAL FOR OBSERVATION - OBSTETRICAL Other

501 ENCOUNTER/REFERRAL FOR OBSERVATION - OTHER DIAGNOSES Other

502 ENCOUNTER/REFERRAL FOR OBSERVATION - BEHAVIORAL HEALTH Other

510 MAJOR SIGNS, SYMPTOMS AND FINDINGS Other

520 SPINAL DISORDERS & INJURIES Other

521 NERVOUS SYSTEM MALIGNANCY Clinic

522 DEGENERATIVE NERVOUS SYSTEM DISORDERS EXC MULT SCLEROSIS Other

523 MULTIPLE SCLEROSIS & OTHER DEMYELINATING DISEASES Other

524 LEVEL I CNS DISORDERS Other

525 LEVEL II CNS DISORDERS Other

526 TRANSIENT ISCHEMIA Other

527 PERIPHERAL NERVE DISORDERS Other

528 NONTRAUMATIC STUPOR & COMA Other

529 SEIZURE Other

530 HEADACHES OTHER THAN MIGRAINE Other

531 MIGRAINE Other

532 HEAD TRAUMA Other


37


533 AFTEREFFECTS OF CEREBROVASCULAR ACCIDENT Other

534 NONSPECIFIC CVA & PRECEREBRAL OCCLUSION W/O INFARC Other

535 CVA & PRECEREBRAL OCCLUSION W INFARCT Other

536 CEREBRAL PALSY Other

550 ACUTE MAJOR EYE INFECTIONS Other

551 CATARACTS Other

552 GLAUCOMA Other

553 LEVEL I OTHER OPHTHALMIC DIAGNOSES Other

554 LEVEL II OTHER OPHTHALMIC DIAGNOSES Other

555 CONJUNCTIVITIS Other

560 EAR, NOSE, MOUTH, THROAT, CRANIAL/FACIAL MALIGNANCIES Clinic

561 VERTIGINOUS DISORDERS EXCEPT FOR BENIGN VERTIGO Other

562 INFECTIONS OF UPPER RESPIRATORY TRACT & OTITIS MEDIA Other

563 DENTAL & ORAL DISEASES & INJURIES Other

564 LEVEL I OTHER EAR, NOSE, MOUTH,THROAT & CRANIAL/FACIAL DIAGNOSES Other

565 LEVEL II OTHER EAR, NOSE, MOUTH,THROAT & CRANIAL/FACIAL DIAGNOSES Other

570 CYSTIC FIBROSIS - PULMONARY DISEASE Other

571 RESPIRATORY MALIGNANCY Clinic

572 BRONCHIOLITIS & RSV PNEUMONIA Other

573 COMMUNITY ACQUIRED PNUEMONIA Other

574 CHRONIC OBSTRUCTIVE PULMONARY DISEASE Other

575 ASTHMA Other

576 LEVEL I OTHER RESPIRATORY DIAGNOSES Other

577 LEVEL II OTHER RESPIRATORY DIAGNOSES Other

578 PNEUMONIA EXCEPT FOR COMMUNITY ACQUIRED PNEUMONIA Other

579 STATUS ASTHMATICUS Other

591 ACUTE MYOCARDIAL INFARCTION Other

592 LEVEL I CARDIOVASCULAR DIAGNOSES Other

593 LEVEL II CARDIOVASCULAR DIAGNOSES Other

594 HEART FAILURE Other

595 CARDIAC ARREST Other

596 PERIPHERAL & OTHER VASCULAR DISORDERS Other

597 PHLEBITIS Other

598 ANGINA PECTORIS & CORONARY ATHEROSCLEROSIS Other

599 HYPERTENSION Other

600 CARDIAC STRUCTURAL & VALVULAR DISORDERS Other

601 LEVEL I CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS Other

602 ATRIAL FIBRILLATION Other

603 LEVEL II CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS Other

604 CHEST PAIN Other


38


605 SYNCOPE & COLLAPSE Other

620 DIGESTIVE MALIGNANCY Clinic

621 PEPTIC ULCER & GASTRITIS Other

623 ESOPHAGITIS Other

624 LEVEL I GASTROINTESTINAL DIAGNOSES Other

625 LEVEL II GASTROINTESTINAL DIAGNOSES Other

626 INFLAMMATORY BOWEL DISEASE Other

627 NON-BACTERIAL GASTROENTERITIS, NAUSEA & VOMITING Other

628 ABDOMINAL PAIN Other

629 MALFUNCTION, REACTION & COMPLICATION OF GI DEVICE OR PROCEDURE Other

630 CONSTIPATION Other

631 HERNIA Other

632 IRRITABLE BOWEL SYNDROME Other

633 ALCOHOLIC LIVER DISEASE Other

634 MALIGNANCY OF HEPATOBILIARY SYSTEM & PANCREAS Clinic

635 DISORDERS OF PANCREAS EXCEPT MALIGNANCY Other

636 HEPATITIS WITHOUT COMA Other

637 DISORDERS OF GALLBLADDER & BILIARY TRACT Other

638 CHOLECYSTITIS Other

639 LEVEL I HEPATOBILIARY DIAGNOSES Other

640 LEVEL II HEPATOBILIARY DIAGNOSES Other

650 FRACTURE OF FEMUR Other

651 FRACTURE OF PELVIS OR DISLOCATION OF HIP Other

652 FRACTURES & DISLOCATIONS EXCEPT FEMUR, PELVIS & BACK Other

653 MUSCULOSKELETAL MALIGNANCY & PATHOLOGICAL FRACTURES Clinic

654 OSTEOMYELITIS, SEPTIC ARTHRITIS & OTHER MUSCULOSKELETAL INFECTIONS Other

655 CONNECTIVE TISSUE DISORDERS Other

656 BACK & NECK DISORDERS EXCEPT LUMBAR DISC DISEASE Other

657 LUMBAR DISC DISEASE Other

658 LUMBAR DISC DISEASE WITH SCIATICA Other

659 MALFUNCTION, REACTION, COMPLIC OF ORTHOPEDIC DEVICE OR PROCEDURE Other

660 LEVEL I OTHER MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE DIAGNOSES Other

661 LEVEL II OTHER MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE DIAGNOSES Other

662 OSTEOPOROSIS Other

663 PAIN Other

670 SKIN ULCERS Other

671 MAJOR SKIN DISORDERS Other

672 MALIGNANT BREAST DISORDERS Clinic

673 CELLULITIS & OTHER BACTERIAL SKIN INFECTIONS Other

674 CONTUSION, OPEN WOUND & OTHER TRAUMA TO SKIN & SUBCUTANEOUS TISSUE Other


39


675 OTHER SKIN, SUBCUTANEOUS TISSUE & BREAST DISORDERS Other

676 DECUBITUS ULCER Other

690 MALNUTRITION, FAILURE TO THRIVE & OTHER NUTRITIONAL DISORDERS Other

691 INBORN ERRORS OF METABOLISM Other

692 LEVEL I ENDOCRINE DISORDERS Other

693 LEVEL II ENDOCRINE DISORDERS Other

694 ELECTROLYTE DISORDERS Other

695 OBESITY Other

710 DIABETES WITH OPHTHALMIC MANIFESTATIONS Other

711 DIABETES WITH OTHER MANIFESTATIONS & COMPLICATIONS Other

712 DIABETES WITH NEUROLOGIC MANIFESTATIONS Other

713 DIABETES WITHOUT COMPLICATIONS Other

714 DIABETES WITH RENAL MANIFESTATIONS Other

720 RENAL FAILURE Other

721 KIDNEY & URINARY TRACT MALIGNANCY Clinic

722 NEPHRITIS & NEPHROSIS Other

723 KIDNEY AND CHRONIC URINARY TRACT INFECTIONS Other

724 URINARY STONES & ACQUIRED UPPER URINARY TRACT OBSTRUCTION Other

725 MALFUNCTION, REACTION, COMPLIC OF GENITOURINARY DEVICE OR PROC Other

726 OTHER KIDNEY & URINARY TRACT DIAGNOSES, SIGNS & SYMPTOMS Other

727 ACUTE LOWER URINARY TRACT INFECTIONS Other

740 MALIGNANCY, MALE REPRODUCTIVE SYSTEM Clinic

741 MALE REPRODUCTIVE SYSTEM DIAGNOSES EXCEPT MALIGNANCY Other

742 NEOPLASMS OF THE MALE REPRODUCTIVE SYSTEM Other

743 PROSTATITIS Other

744 MALE REPRODUCTIVE INFECTIONS Other

750 FEMALE REPRODUCTIVE SYSTEM MALIGNANCY Clinic

751 FEMALE REPRODUCTIVE SYSTEM INFECTIONS Other

752 LEVEL I MENSTRUAL AND OTHER FEMALE DIAGNOSES Other

753 LEVEL II MENSTRUAL AND OTHER FEMALE DIAGNOSES Other

760 VAGINAL DELIVERY Other

761 POSTPARTUM & POST ABORTION DIAGNOSES W/O PROCEDURE Other

762 THREATENED ABORTION Other

763 ABORTION W/O D&C, ASPIRATION CURETTAGE OR HYSTEROTOMY Other

764 FALSE LABOR Other

765 OTHER ANTEPARTUM DIAGNOSES Other

766 ROUTINE PRENATAL CARE Other

770 NORMAL NEONATE Other

771 LEVEL I NEONATAL DIAGNOSES Other

772 LEVEL II NEONATAL DIAGNOSES Other


40


780 OTHER HEMATOLOGICAL DISORDERS Other

781 COAGULATION & PLATELET DISORDERS Other

782 CONGENITAL FACTOR DEFICIENCIES Other

783 SICKLE CELL ANEMIA CRISIS Other

784 SICKLE CELL ANEMIA Other

785 ANEMIA EXCEPT FOR IRON DEFICIENCY ANEMIA AND SICKLE CELL ANEMIA Other

786 IRON DEFICIENCY ANEMIA Other

800 ACUTE LEUKEMIA Clinic

801 LYMPHOMA, MYELOMA & NON-ACUTE LEUKEMIA Clinic

802 RADIOTHERAPY Minor Surgery

803 CHEMOTHERAPY Minor Surgery

804 LYMPHATIC & OTHER MALIGNANCIES & NEOPLASMS OF UNCERTAIN BEHAVIOR Clinic

805 SEPTICEMIA & DISSEMINATED INFECTIONS Other

806 POST-OPERATIVE, POST-TRAUMATIC, OTHER DEVICE INFECTIONS Other

807 FEVER Other

808 VIRAL ILLNESS Other

809 OTHER INFECTIOUS & PARASITIC DISEASES Other

810 H. PYLORI INFECTION Other

820 SCHIZOPHRENIA Psychiatric

821 MAJOR DEPRESSIVE DISORDERS & OTHER/UNSPECIFIED PSYCHOSES Psychiatric

822 DISORDERS OF PERSONALITY & IMPULSE CONTROL Psychiatric

823 BIPOLAR DISORDERS Psychiatric

824 DEPRESSION EXCEPT MAJOR DEPRESSIVE DISORDER Psychiatric

825 ADJUSTMENT DISORDERS & NEUROSES EXCEPT DEPRESSIVE DIAGNOSES Psychiatric

826 ACUTE ANXIETY & DELIRIUM STATES Psychiatric

827 ORGANIC MENTAL HEALTH DISTURBANCES Psychiatric

828 MENTAL RETARDATION Psychiatric

829 CHILDHOOD BEHAVIORAL DISORDERS Psychiatric

830 EATING DISORDERS Psychiatric

831 OTHER MENTAL HEALTH DISORDERS Psychiatric

840 OPIOID ABUSE & DEPENDENCE Other

841 COCAINE ABUSE & DEPENDENCE Other

842 ALCOHOL ABUSE & DEPENDENCE Other

843 OTHER DRUG ABUSE & DEPENDENCE Other

850 ALLERGIC REACTIONS Other

851 POISONING OF MEDICINAL AGENTS Other

852 OTHER COMPLICATIONS OF TREATMENT Other

853 OTHER INJURY, POISONING & TOXIC EFFECT DIAGNOSES Other

854 TOXIC EFFECTS OF NON-MEDICINAL SUBSTANCES Other

860 EXTENSIVE 3RD DEGREE OR FULL THICKNESS BURNS W/O SKIN GRAFT Other


41


861 PARTIAL THICKNESS BURNS W OR W/O SKIN GRAFT Other

870 REHABILITATION Rehabilitation

871 SIGNS, SYMPTOMS & OTHER FACTORS INFLUENCING HEALTH STATUS Other

872 OTHER AFTERCARE & CONVALESCENCE Other

873 NEONATAL AFTERCARE Other

874 JOINT REPLACEMENT Other

875 CONTRACEPTIVE MANAGEMENT Other

876 ADULT PREVENTIVE MEDICINE Clinic

877 CHILD PREVENTIVE MEDICINE Clinic

878 GYNECOLOGIC PREVENTIVE MEDICINE Clinic

879 PREVENTIVE OR SCREENING ENCOUNTER Clinic

880 HIV INFECTION Other

881 AIDS Other

993 INPATIENT ONLY PROCEDURES Major Surgery

994 USER CUSTOMIZABLE INPATIENT PROCEDURES Other

999 UNASSIGNED Unassigned

1001 DURABLE MEDICAL EQUIPMENT - LEVEL 1 Other




















1090 USER DEFINED 340B DRUGS Drugs


42

Appendix VIII: Steps in Calculating Outpatient Weights

OVERVIEW

HSCRC uses ECMADs as a method for quantifying inpatient and outpatient hospital volume into

a single measure. This appendix outlines the methodology for (1) calculating the weight of an

outpatient visit within the context of a hospital’s ECMAD count, and (2) assigning outpatient

service lines.

BACKGROUND

HSCRC uses ECMADs in several calculations, including the reasonableness of charge (ROC)

methodology, the global budget demographic adjustment, and MSAs. A hospital’s ECMAD

count includes case-mix adjusted inpatient discharges, as well as equivalent outpatient case-mix

adjusted discharges, which are values imputed from a hospital’s outpatient total and unit charges.

Inpatient cases can be attributed to a single diagnosis-related group (DRG), which groups up to

30 diagnosis and procedures codes into a single category. Inpatient weights reflecting relative

complexity and resource demands have been used for many years. Creating a similar measure in

the outpatient setting, on the other hand, is more complex. A single outpatient visit can contain

up to 45 Current Procedural Terminology (CPT) codes, and therefore 45 EAPGs, which require a

more complex weighting methodology in the outpatient setting.

OUTPATIENT ECMAD WEIGHT CALCULATION

Outpatient weights for ECMADs are calculated by first classifying outpatient visit records by

principal EAPG Type into groups and then creating weights within those groups based on the

normalized distribution of expected charges for each outpatient visit record about the group

average. Within certain groups, specific EAPGs are excluded, and trim points3 are applied to the

resulting distributions before creating weights. These details are outlined in greater detail in the

section below.

A. Group and Assign Outpatient Records a Principal EAPG Type

Step 1: Group Data

The outpatient data are grouped using the EAPG grouper version 3.8. An EAPG is identified for

every CPT code in the record. Each record can contain up to 45 EAPGs.

3 A trim point is the value at which a certain percentage of the largest and smallest values around that value for any

given variable is removed before calculating the mean of that variable.


43

Step 2: Exclude Observation Cases

If the Observation Rate Center units in any outpatient visit record are greater than 23, the entire

record is excluded from the outpatient weight assignment calculation as they are included in the

inpatient ECMAD calculations.

Step 3: Assign Principal Record Type

A principal EAPG Type is assigned to records that have more than one EAPG. In order to do

this, HSCRC applies a hierarchy based on EAPG Type. This is appropriate because each CPT

code (up to 45 per record) is linked to an EAPG, and each EAPG is linked to an EAPG Type.

The hierarchy for assigning a principal EAPG Type is as follows:

Type 1: Mental Health/Substance Abuse

Type 2: Significant Procedures

Type 3: Medical Visit

Type 4: Ancillary

Type 5: Incidental

Type 6: Drug

Type 7: Durable Medical Equipment

Type 8: Unassigned

For example, if a single record contained both an EAPG classified as Type 1(Mental

Health/substance Abuse) and an EAPG classified as Type 4 (Ancillary), then the entire record

would be assigned the principal EAPG Type 1 because Type 1 is superior in the hierarchy. Table

1 presents additional examples of how the EAPG Type is assigned.

Table 1. Assignment of Overall EAPG Type

EAPG 1

EAPG 2

EAPG 3

EAPG 4

EAPG TYPE

1

EAPG TYPE

2

EAPG TYPE

3

EAPG TYPE

4

Principal EAPG Type

Record A

6 6 9 390 2 2 2 4 2

Record B

295 408 9 4 4

Record C

491 401 408 628 5 4 4 3 3

Record D

403 403 410 400 4 4 4 4 4

Note: An EAPG Type of ‘0’ is assigned to any record that contains only zeros or blanks.


44

B. Assign Weights to Radiation, Chemotherapy, and Non-Minor Infusion Records

Steps 4 through 8 only apply to radiation, chemotherapy, and non-minor infusion records

(defined below).

Step 4: Select Radiation Therapy, Chemotherapy, and Non-Minor Infusion Records

The selection of the records for this service line is based on three criteria:

1. Includes at least one EAPG from the list below

2. Related rate center charges are greater than operating room rate center charges

3. There are no charges for Emergency Services, Free Standing Emergency Services, and

Trauma Resuscitation

Below is the list of EAPGs and related rate centers used to compare with operating room

charges.

Radiation Therapy EAPGs: 340, 341, 342, 343, 344, 345, 346, 347, 348,

349,476,477,478,482,483,484,802, and radiology (diagnostic and therapeutic) rate

centers

Chemotherapy EAPGs: 1, 431, 432, 433, 434, 441, 443, 460, 461, 462, 463, 464, 465,

803, and drug rate centers

Infusion EAPGs: 110, 111, and drug rate centers

Step 5: Aggregate all Records and Associated EAPG Charges to a Patient-Level Record by Hospital and CRISP EID or Medical Record Number

All records with the same CRISP EID and hospital are aggregated into a single record to create a

patient-level record for the service line. If the CRISP EID is missing, medical record numbers

are used for this aggregation. The earliest “From” date found is kept as the patient’s service start

date, and the latest “Thru” date is kept as the service end date. EAPGs are unduplicated, and

associated EAPG charges are summarized for each patient record.

Step 6: Identify a High-Weight EAPG within a Bundled Record

The following hierarchy is used for selecting and classifying patients within the oncology bundle

to ensure the unique assignment of relevant EAPGs to the service line, avoid overlap, and ensure

that categories are mutual exclusive:

1. First, cases with infusion EAPGs (110 and 111) in any of the 45 or more EAPG fields are

selected. If a case has both EAPGs 110 and 111, the case is assigned a “High-Weight

EAPG” of 110.


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2. Cases with chemotherapy EAPGs (1, 430, 431, 432, 433, 434, 441, 443, 460, 461, 462,

463, 464, 465, 495, and 803) in any of the 45 or more EAPG fields are then selected. The

case is then classified to an EAPG that has the highest weight among these listed EAPGs.

3. Finally, cases with radiation therapy EAPGs (340, 341, 342, 343, 344, 345, 346, 347,

348, and 349,476,477,478,482,483,484, and 802) in any of the 45 or more EAPG fields

are selected. The case is then classified to an EAPG that has the highest weight among

these listed EAPGs.

Step 7: Calculate a High-Weight EAPG Per Diem Charge and Per Diem ECMAD

To adjust for the differences in duration of services, length of stay is calculated using the number

of days between the service start date and the service end date (inclusive of the service start

date). A per diem charge is calculated for each record as the total charge divided by the length of

stay. An average per diem charge based on the per diem charge for each record is then calculated

for each High-Weight EAPG. A per diem weight for each High-Weight EAPG is then calculated

as the average per diem charge divided by the statewide average charge per outpatient record. A

per diem ECMAD is also similarly calculated.

Step 8: Apply Weight and ECMAD

For each radiation, chemotherapy, and non-minor infusion bundled record, a weight is calculated

as the per diem weight for the associated High-Weight EAPG multiplied by the length of stay.

Similarly, the ECMAD for the record is the per diem ECMAD for the associated High-Weight

EAPG multiplied by the length of stay.

C. Assign Weights to Records with Principal EAPG Type 2 (Significant Procedure)

Steps 9 through 11 only apply to outpatient records with a principal EAPG Type of 2 (significant

procedures).

Step 9: Exclude EAPGs with Consolidation, Packaging, and Termination Indicators

The 3M EAPG Grouper is applied to the first 45 EAPG fields of each outpatient record with a

principal EAPG Type of 2 to identify EAPGs with consolidation, packaging, and termination

indicators. If any one of the following four fields is flagged (= “1”), then the corresponding

EAPG (not the whole record) is excluded:

Patient-Terminated Procedure Discount Flag

Packaging Flag

Same Significant Procedure Consolidation Flag

Clinical Significant Procedure Consolidation Flag


46

Step 10: Exclude Some Non-Significant Procedure EAPGs

Non-significant procedure EAPGs—not whole records—are excluded (EAPGs of 0, 999, and

greater than 373).

Step 11: Create and Apply Singleton Weights to Remaining Records

A table of “singleton expected charges” is created from the average charge per EAPG of records

containing only one Type 2 EAPG. This table is used to determine the statewide expected charge

for each EAPG. These expected charges per EAPG are then used to determine an expected

charge per outpatient record. The distribution of expected charge per outpatient record is then

pseudo-normalized (three iterations only) about the actual mean statewide charge per outpatient

record to yield an adjusted charge per outpatient record.

A charge adjustment factor is then calculated for each hospital. The charge adjustment factor is

calculated from each hospital’s ratio of overall mean-adjusted outpatient charges/overall mean-

expected outpatient charges. The adjusted charge for each record of a given hospital is divided

by this factor, and the distribution of these values are then pseudo-normalized (three iterations

only) about the actual mean hospital charge per outpatient record to yield the weight for the

outpatient record.

D. Assign Weights to Records with a Principal EAPG Type 3 (Medical Visits)

Step 12 is only applied to outpatient records with a principal EAPG Type of 3 (medical visits).

Step 12: Find Medical Visit EAPG sand Calculate Weights

Records with a principal EAPG Type of 3 only have one medical visit EAPG. Non-medical

EAPGs (EAPG = 999 or < 500) are excluded from the record. The remaining EAPG is a medical

visit EAPG. Only medical visit EAPGs are used to calculate the expected charge of the

outpatient record. The distribution of the expected charge per outpatient record is then pseudo-

normalized about the actual mean statewide per outpatient record in order to arrive at the

adjusted charge per outpatient record.



expected outpatient charges. The adjusted charges are divided by this factor, and the distribution

of these values are then pseudo-normalized (three iterations only) about the actual mean hospital

charge per outpatient record to yield the weight for the outpatient record. If the total charge for

case is greater than the trim point for the medical EAPG, the included charge will be based on

the trim point. (Trim point = the greater of: (weight *2) or (weight + $10,000)).


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E. Assign Weights to Records with Other Principal EAPG Types

Step 13: Find Other Visit EAPGs (Types 0, 1, 4-8) and Calculate Their Relative Weights

Records with EAPG Types 0, 1, 4, 5, 6, 7, and 8 are treated as if they have only one EAPG in the

record (regardless of the number of EAPGs found in the record). The first recorded EAPG is

treated as the only EAPG in the record. For visits assigned an EAPG Type of 0, the EAPG for

the record is set at 0.

An expected charge is calculated for the identified EAPG in the record. The distribution of

expected charge per outpatient record is then pseudo-normalized about the actual mean statewide

per outpatient record in order to arrive at the adjusted charge per outpatient record.



expected outpatient charges. The adjusted charges are divided by this factor, and the distribution

of these values are then pseudo-normalized (three iterations only) about the actual mean hospital

charge per outpatient record to yield the weight for the outpatient record. If the total charge for

the case is greater than the trim point for the EAPG, then the included charge will be based on

the trim point. (Trim point = the greater of: (weight *2) or (weight + $10,000.))

F. Merge the Datasets with Weights and Normalize the Weights to an Overall Statewide Average Weight of 1.00

Step 14: Calculate the Statewide Normalized Weights for each High-Weight EAPG

The overall average statewide expected charge for all records is calculated using the entire

outpatient record dataset. Each high EAPG weight is calculated as the expected charge divided

by the average statewide expected charge. Next, the statewide CMI is calculated for all records.

The ratio of 1 to the statewide CMI is calculated as an Adjustment Factor. Each record's high

EAPG weight is multiplied by the Adjustment Factor to normalize the statewide CMI to 1.00.

The weight is then rounded to the nearest 0.000001.

G. Calculate the ECMAD as the High EAPG Weight Multiplied by a Factor (Calculated as the Average Outpatient Charge Divided by the Average Inpatient Charge)

Step 15: Calculate the Statewide Average Charge per Case from the Included Cases Used to Determine the Inpatient Weights from the Inpatient Dataset

The statewide average charge per outpatient record is determined from the outpatient dataset in

Step F above. The ECMAD Adjustment Factor is then calculated as the statewide average charge

per outpatient record divided by the statewide average charge per inpatient case. The ECMAD is

defined as the normalized weight from Step 10 multiplied by the ECMAD Adjustment Factor.


2

Appendix IX: Public Comments

HSCRC provided opportunity for public comment on the MSA approach described in this report

and received three sets of comments. The comment letters are included as an attachment to this

report.

1. Johns Hopkins Health System and University of Maryland Medical System

2. Lifebridge Health

3. TPR Hospital Collaborative

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